Novated Leasing Myths Busted
Novated leasing is one of the smartest and most cost-effective ways to buy a car.
beCarWise customers save thousands on the purchase price of their vehicle, save on GST and save tax. Our customers simply choose the car they want and use pre-tax salary for repayments and then enjoy driving. Sound too good to be true? It’s not. Here are some of the myths of novated leasing – busted!
Myth #1: I don’t own my car
Yes, you do. The term leasing scares off many car buyers, who compare it to renting a house versus owning your home. Novated Leasing is just a form of finance that enables you to buy and run your car cheaper, lessening the impact on your personal finances, while also reducing your tax liability. Your car is registered and insured in your name, and you don’t have to hand it back at the end of the lease.
At the end of the lease you have three options:
1. Upgrade to a new car and rollover into a new lease. BeCarWise will also manage your trade-in disposal for you,
2. You can refinance the residual and extend the lease period on your car, which reduces your repayments substantially,
3. Pay out the amount owing and keep the car.
Myth #2: I can only lease a new car
Novated leasing is not only for new vehicle purchases. You can take out a novated lease on a second-hand car, or even arrange a lease arrangement with your current car under a ‘sale and lease back’ agreement.
Under a ‘sale and lease back’ you can enjoy the perks of novated leasing on your existing car. BeCarWise will work with you to determine an agreed value, pay off the existing finance or if you own it, you receive a lump sum of cash from the equity in your car. You can then enjoy the convenience and potential tax savings.
Depending on your employer policy, you can also lease more than one car at a time so the whole family can benefit.
Myth #3: I don’t earn enough money
Novated leasing enables employees of any wage bracket or income to benefit. The savings kick in straightaway with the discounted purchase price on your car and savings on the GST. Thanks to our national buying power, you can benefit from substantial fleet discounts before you even get behind the wheel.
Then factor in running and maintenance expenses, registration, fuel, servicing, tyres and comprehensive insurance. All these costs are GST-free and taken out of your pre-tax salary as part of an affordable fixed monthly payment.
You pay less for your vehicle while at the same time reducing your taxable income and saving on tax.
Myth #4: I don’t do enough kilometres to benefit from leasing
In 2014 the tax rules changed. You can now reap the reward on tax savings on the purchase of a car, regardless of how many kilometres you drive each year. And because your running costs are calculated according to how much you drive, you only pay for what you use.
If you have any other questions about Novated Leasing please speak to one of the beCarWise consultants on 1300 734 500. We would be happy to arrange an obligation-free tailored proposal, or a workplace visit at your convenience.
Find out more frequently asked questions here.
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