As you get old, managing your finances can become like a juggling act – as your bills keep adding up! Luckily, with a car novated lease, you won’t have to worry about all of your vehicle-related costs, and you can enjoy a tax break, as well!
When it comes time to procure your next car, the first question you ask yourself is ‘how much is it going to cost me’? In most cases, obtaining a new vehicle with a car loan that unfortunately accumulates interest can end up costing quite a lot.
A car novated lease is the smartest way to drive as the cost of the vehicle is subtracted directly from your taxable income via your employer, saving you money on tax and eliminating interest. Continue reading to see just how many ways a car novated lease can make your life easier!
Are on-road costs included?
Every car novated lease incorporates not only the repayments for the vehicle itself but also the associated costs of using that vehicle. We won’t go into how these costs get calculated in this post, but you can have a look at our car novated lease calculator to see how Vehicle Solutions makes these calculations!
Firstly, yes, fuel costs are included in a car novated lease. You will get a fuel card, which will be topped up with your annual fuel budget. It means that even your fuel costs get deducted from your taxable income!
We will determine a budget for your tyres as well, all of which are dependent on your salary, the type of vehicle you have selected and the length of your car novated lease. Not only are material costs included but a car novated lease will cover your maintenance and servicing as well as your registration and insurance.
But I don’t own the car at the end?
The way that a car novated lease works are that the ATO will allow your employer to pay for your vehicle, saving your time and money. However, by doing this, it also means that you don’t have any equity when it comes to the car.
When your car novated lease finishes, a residual value is what you’ll need to pay should you want to retain the vehicle, which is equal to a realistic amount that the car would fetch on the current market. Of course, this means that all your repayments during the car novated lease are much cheaper.
It’s an excellent way for customers to get into a more expensive car that they wouldn’t usually be able to afford. You can also choose to extend the lease of the vehicle or sell the car and pocket the difference if the price has held up.
For help with the best cars to look at, call Vehicle Solutions today and find out more about your vehicle novated lease!