Novated leasing continues to grow in popularity throughout Australia. More and more Aussies see it as a great way to save on a car purchase - but what are the specific reasons why it’s seen as an enticing option?
We understand that having as much knowledge about novated leases is going to help in making the most informed decision for your particular situation. This guide aims to assist with building that knowledge by providing a compilation of some great benefits of getting a novated lease in Australia.
What is novated leasing?
At its core, novated leasing is a form of car salary packaging. An employer and employee come to an agreement wherein the employee is allowed to use a portion of their pre-tax salary to pay for a car. Novated lease payments not only include paying for the purchase price of the vehicle, but also for things such as the car’s running costs.
Financial benefits of a novated lease
Tax deductions
One of the key benefits of a novated lease is that you have access to considerable tax deductions. By salary packaging, you end up paying less in income tax since the car payments are taken out before tax. This can leave you with more funds available for other potential investments or simply more money in your pocket at the end of each financial year.
This can also involve providing savings on Fringe Benefits Tax (FBT) - tax employers pay for some employee benefits. Last year, the Australian government announced an FBT exemption for electric cars, in an even bigger bonus to this.
Structured payments
With a novated lease, you have the ability to structure your payments on a consistent basis. With this comes the advantage of being able to manage your taxable income more effectively by setting up regular payments that suit both your and your employer’s needs. It also allows for peace of mind when it comes to budgeting by knowing how much of your post-tax income you will be receiving.
Car ownership benefits of a novated lease
Flexibility in choice of vehicle
A novated lease allows you the flexibility to choose from a wide range of car makes and models. You are not limited to one specific vehicle, giving you the freedom to find the perfect solution for your current needs.
No longer do you need to worry about a car that is too expensive to purchase upfront. A novated lease company can help you get in the car you want for less.
No restrictions on vehicle use
Some salary package or lease agreement deals - as well as many standard car loan arrangements - are limited only to products that are being used either primarily for work or primarily for personal use. Novated leases allow you to use the vehicle for whatever purpose you need it for, giving you the freedom to enjoy your car how you want.
Maintenance benefits of a novated lease
Bundled maintenance and service packages
Novated leasing companies often offer bundled packages that provide access to key maintenance and servicing needs. These can include car servicing, oil changes, registration fees and other associated costs of vehicle ownership. This means that you have one point of contact for all your car-related needs which makes it easy to keep track of expenses while also giving peace of mind that all the necessary checks are done on time.
Cheaper fuel and other running costs
Novated leases also provide you with a better deal on fuel and other car running costs. When you package all of your car-related expenses together, it means that you can benefit from greater savings when it comes to refuelling. This is especially true if the novated lease company offers discounts or loyalty rewards for certain petrol retailers or services.
Work benefits of a novated lease
Increase value for employee remuneration packages
If you are looking to attract talented employees, a novated lease can provide an additional incentive. It adds value to employee remuneration packages which can help in competing for the top talent in your industry.
Being able to promote that you are able to offer your employees a fully maintained novated lease - if they wish to have one - will go a long way to increasing the number of enquiries you get from job advertisements.
Improved employee satisfaction and retention
Having a novated lease package as part of an employee’s remuneration package can also improve job satisfaction and retention. Knowing that they are getting the most out of their wage in terms of tax savings, and having access to discounted fuel or vehicle maintenance costs, also improves morale and productivity in the workplace which is beneficial for both employer and employee.
Get the best benefits from the right novated lease provider
There are even more great benefits to a novated lease that we weren’t able to cover in this article - but it’s clear that a novated lease can be an excellent alternative to a standard car finance or car loan agreement.
Easi has over 20 years of experience in the industry of car leasing - meaning the team can apply their vast knowledge to ensure you get the most out of your novated lease. Our wide range of vehicles comes under flexible contract terms and covers many different body types.
To get started on your novated lease journey, get in touch with us today and learn more.
.jpeg)