Novated Lease: 7 Amazing Benefits with Auto Now Credit for 2023

  • Auto Now Credit are a car finance business for customers with a bad credit history and are struggling to get a loan for a car. Offering second chance loans, bad credit car loans, ABN holder work vehicle loans, rent to own car finance and bankruptcy car loans.
Explore the benefits of a novated lease. Learn how this unique car financing option can offer tax savings and flexibility.

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In the landscape of car financing, a novated lease stands out as a unique and beneficial option for both employees and employers. But what exactly is it? Here’s a detailed look into what a novated lease entails, its benefits, and how to choose the right one for you.

What is a Novated Lease?

This type of lease involves an employer, an employee, and a lease provider. It's an arrangement where an employee can finance a vehicle as part of their salary package. This method of financing allows payments to be made from the employee's pre-tax salary, offering potential tax savings.

Roles in the Agreement:

  • Employer - Commits to deducting a specified amount from the employee's salary, directing these funds to the lease provider.

  • Employee - Agrees to these deductions in return for the vehicle's use, which can be for business or personal purposes.

  • Lease Providers -Handle vehicle procurement, initiate the lease, and oversee administrative and compliance-related tasks.

Top Benefits of Novated lease

  • No GST on the car or its running expenses.
  • Employers can reclaim GST as a tax credit.
  • Reduced payroll tax for employers.
  • No obligation for the employer towards the vehicle or its lease.
  • A cost-friendly way to get a vehicle.
  • Potential income tax savings for employees.
  • Maintenance-covered personal vehicle.
  • 100% personal use of the vehicle.
  • Transferability of the lease when changing employers.
  • Use the vehicle for both personal and business purposes without restrictions.

Choosing Your Lease:

You can opt for a fully maintained or a non-maintained lease. The fully maintained option covers all the running costs from the get-go, making it a popular choice among many.

Accessorizing Your Vehicle:

Accessories can be added to your car under this lease. Popular additions include floor mats, window tints, roof racks, tow bars, and side steps.

Comparing Fully Maintained vs. Self-managed Leases:

A fully maintained lease covers all maintenance and running costs, whereas a self-managed lease only caters to the vehicle's financing.

Lease vs. Car Loan:

Both these financing options offer full vehicle ownership. The primary difference lies in the financing details and who bears the vehicle's running costs.

New and Used Cars:

While most leases are for new cars, used cars can be an option too. To benefit from GST savings, the used car should be purchased from a dealer.

End of Lease Options:

At the end of the lease term, you have multiple options: paying any residual amount and owning the vehicle, selling the car and keeping any profit, refinancing the vehicle, or sometimes returning the car to the leasing company.

Interest Rates:

Interest rates for these leases typically range between 7% and 12%. Various factors influence these rates, such as the vehicle's price, its age, and the seller's type.

Qualifying for a Lease:

To qualify in Australia, ensure you're employed full-time or on a permanent part-time basis, your employer supports such leasing, you can meet the repayments, and you're over 21 years old. The chosen vehicle should be a passenger vehicle, and its payload should not exceed 1,000 kg.
This form of lease offers a flexible and tax-effective way to finance a car. Understanding its nuances can help you make an informed decision that suits your financial and personal needs. Apply Now.

FAQ

A novated lease is a three-way car financing agreement among an employer, an employee, and a novated lease provider.

It allows you to finance a vehicle with your pre-tax salary, which can lead to significant income tax savings.

Yes, the vehicle can be used for both personal and business purposes.

You won’t pay GST on the vehicle’s purchase price or its running costs, leading to substantial savings.

A fully maintained lease covers all vehicle maintenance and running costs, while a self-managed lease only deals with the vehicle’s financing.

While both provide full vehicle ownership, a novated lease includes the vehicle’s finance cost and its operating expenditure, while a car loan typically covers only the vehicle’s price.

Yes, but the car shouldn’t be more than 15 years old at the end of the lease term.

Options include paying any residual amount to own the vehicle, selling the car and keeping any profit, refinancing the vehicle, or in some cases, returning it to the leasing company.

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