Frequently asked Questions
Novated Leasing General F.A.Q
Does everyone save thousands via leasing a car?
You can also view your approx savings via our Novated Lease calculator.
Can I gain the savings through a Novated Lease if I own my car or have a personal loan on it?
With your new car currently under finance we can arrange to pay this loan out as long as the value of your car does exceed the amount owing. Then we arrange a Novated lease for you. If you own the car outright, our financier simply purchases your car at an agreed market value and you lease it back.
Am I allowed to use my preferred motor vehicle insurance company?
If you choose to use your own insurance company, you will need to let us know so that 1. we can add it to your Novated Lease budget and 2. when you pay the renewal you will need to submit a claim to us for reimbursement.
Do I have to use your roadside assistance product?
I am casual will this affect me getting a Novated Lease?
If you have been told you can be given a Novated Lease and you earn well under our bench mark, please seek a second opinion.
You mention I can still gain savings even if I drive low Kms each year, is this correct?
What happens to my lease if I decide to leave my employer for a new job opportunity?
Is there any residual or balloon payment at the end of my lease?
Two months prior to your lease term ending your leasing company will contact you with an offer for you to pay out this residual amount before the ownership is transferred to you, a common option for those retiring.
Another option, should you love your car and not ready to purchase a new one, you may choose to re-lease your balloon payment to keep gaining your tax benefits. Having 2 months’ notice, most people choose to sell their car to either cover the balloon payment or if structured correctly sell the car for a little more than what’s left owing, pocketing the profit, then lease a brand-new car. Of course, you can also pay out the balloon payment and hand the car over to your children !
What is the best term to run my lease for?
Because a lease agreement is essentially a “rental” agreement you do not have the option of “paying it out early” like standard loan contract if your circumstances change. Under a Novated Lease you MUST pay the entire number of contracted lease payments including the last residual payment.
You may be tempted to choose a 5 year lease term, we would probably recommend a 3 year term knowing that you can always extend it for another 2 years if you so choose at minimum additional cost.
Am I allowed to make any modifications to my motor vehicle?
Can I lease a 2nd hand car?
You mention I receive a Motorpass Charge Card, how does this work?
How long will it take to receive approval on a Novated Lease for my new car?
On your example Novated Lease comparison I see ECM what does this mean and can you explain the FBT part?
That being that a flat statutory rate of 20% applies, regardless of the distance travelled, to all car fringe benefits provided from 1 April 2014 (except where there is a pre-existing commitment in place before 7.30pm AEST on 10 May 2011 to provide a car).
Next, Employee Contribution Method (ECM) this amount is your post tax contribution which is designed to eliminate any FBT liability on you and your Employer, i.e. the FBT purchase value of your new vehicle is $25,000, (25,000 x 20% = $5,000 ECM) You are paid fortnightly, therefore $192.30 will be deducted post tax each pay day.
How do we implement the payment solution for Novated Leases?
Our team will guide your HR or payroll office staff through the procedure and also send them a comprehensive guide. Our specialists are also able to help over the phone.
What costs do we as a business need to cover?
The beauty of this salary packing solutions is there are no extra costs to your business aside from a little time for your payroll staff to setup the payment system.
What are the set up and ongoing costs to the employer to put this employee benefit in place?
Do you have unanswered questions? Let us know and we will be happy to answer them.
Novated Car Leasing Options does not purport to offer legal, financial or taxation advice. Employers and employees should seek independent advice as to the implications of a Novated Lease transaction. The salary packaging amounts and take-home pay calculations set out are estimates only. While due care is exercised by us to ensure the integrity of the estimates it does not make any warranties, express or implied as to its accuracy or completeness. Powered by Paywise. Trademarks and Brands are the property of their respective owners.