Is Novated Leasing a car like having a car loan?
Novated Leasing or a car loan is one of the most common questions we get asked. Vehicle solutions can provide both options however where an employer provides Novated Leasing as an option we believe it represents a far more affordable and convenient method of paying for your car and running costs.
Firstly to view the actual numbers on the difference between a car loan and the option of Novated Leasing please refer to our previous article HERE.
The main differences between a car loan and taking advantage of Novated Leasing is; the residual value at the end of the lease and the ability to pay for all of the running costs on the vehicle in a tax effective manner through your employer. Both options have interest to pay, a term to pay the finance off over and legally binding contracts to sign.
Myths between a loan and a Novated Lease
MYTH – “I want to own my car at the end of the finance, I can’t do this with a lease”.
TRUTH – Even with a lease you have the option to pay the residual and own the car at the end of the lease. The lease payments are cheaper over the term of the lease simply because you are paying off less of the car. However this makes leasing a more expensive car more affordable.
MYTH – “The interest rate is higher”
TRUTH – “Lending on cars is the same no matter weather you do a loan or a lease. Simply do your homework and ask for a few quotes and look at the cost of the lease payment.
MYTH – “I will be left with a big bill at the end of the lease”
TRUTH – If you choose your car correctly and you set the residual value at a minimum you are most likely going to make thousands of dollars at the end of your lease tax free. By choosing a car that holds its value and having a small residual means that you have the option to sell your car and pocket the difference between the residual payment and what you get for your car.
To compare loan repayments to the Novated Leasing option please go to our Novated lease calculator or call us on 1300 990 880.
If you haven’t found your new car yet but know what you want please try our online new car buying platform www.motorbuys.com.au. Motorbuys is designed so that you can choose the exact car in a few simple clicks. Motorbuys is the only site that allows you to choose the exact colour and accessories so that dealers can provide an accurate quote, so you can make a more informed decision. You remain anonymous in the entire process.
To find out if you can afford the lease on the car you want first obtain a pre-approval. We can get a pre-approval within minutes, start by clicking HERE.