A Novated Lease for car choice is one of the most important decisions to make in the process, and worth spend a little more time on to get it right. This decision will not only save you money over the lease term buy is crucial in making you money at the end of the lease. When considering a Novated Lease for a car common sense is key and the four main things that should be top of mind are;
- What are you using the car for? The car needs to fit your lifestyle now and for the term of the lease. The reason for this is the break cost out of a lease can be high during the first two thirds of the lease term. So it is very important for example if your family is growing don’t buy a small two door sports coupe. We also have a number of employees coming to the end of their working lives and want a good 4×4 to travel around Australia, so they pick this vehicle now, save tax for the lease period and have a vehicle that suits their needs into the future. This is all common sense but worth having a good think about before making a decision.
- How long do you keep car for? Do a lease over the period of time that you normally keep cars for. To many times we have people that are used to changing cars every 3 to 4 years do 5 year leases simply because the payments are $15 to $25 per fortnight cheaper. It is much better to pay the extra and have the option to get into a new car when want to. However, if you are they type of person that keeps a car for 5 to 10 years then maximise your tax and do a 5 years lease.
- Pick a car that holds its value. This is one of the most important decisions in buying a car, even if its not on a Novated Lease. We always provide the same advice, choose a car that is not purchased by big fleet companies such as rental cars or governments. This is because certain manufacturers will offer these organisations big discounts to buy large volumes of certain vehicle models, usually the lower specification (base) models (this is important, as buying the higher spec models is perfectly safe). The problem with offering large discounts is that it allows the organisation to sell the vehicle in time at a lower price without being out of pocket. The other fact is that these organisations buy and sell in large volumes and if you are trying to sell your vehicle in the same market, you will find it very difficult to compete with a higher price.
- On going costs such as fuel usage, servicing costs and insurance. Simply check with the manufactures website as to the fuel usage and if there is a capped price service schedule. The difference in every $250 a year in the running costs is about $10 per fortnight so a car that has a fixed price service cast of $250 as opposed to a variable service cost that may go as high as $800-$1000 for one service could have a huge impact on your budget. It is also worth getting a quick quote on insurance as different vehicles have different risk ratings and premiums can vary significantly. If you would like a quote for insurance that includes a new for old option for the life of the car please call us on 1300 990 880.
Popular Novated Lease For Car Choices
We are seeing a real increase in the number of SUV’s being chosen by employees on Novated Leases. The makes and models that represent great value in our opinion include the Honda CRV range, Subaru Outback and Forrester, Toyota Prado and Landcruiser range, mid to high spec Kia Sorrento, Mid to high spec Hyundai Tucson and Santa Fe, Mid to high spec Mazda CX3, CX5, CX9, Mitsubishi Pajero Sport.
If you haven’t found your new car yet but know what you want try our online new car buying site 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.
We are always here to help and answer any questions, please don’t hesitate to call us on 1300 990 880 or complete an online enquiry and we will call you back immediately within working hrs.
Use our Novated Lease calculator, it’s free and we don’t ask for your personal details. This means you can do as many quotes as you like on as many different car prices and salary levels you need.