There is a misconception among people that novated leases are only meant for rich people. But this is not true. This form of car financing works well for different range of car users and buyers.
The main advantage of this type of leasing is, you will have the freedom to choose whichever car you want. Taxes and death are said to be the only two things in life that we cannot escape from. Everybody wants to reduce taxes.
If we find any opportunity to reduce taxes, we will not miss that chance. Here is a way to reduce your taxes, and there are many people who don’t have any idea about it. By taking the advantage of novated leases, you can reduce your taxes.
This type of leasing is actually tax and cost-effective. As the car running cost and car monthly payments will be paid by the employer, by deducting it from their employee’s account, the overall taxable income reduces.
There are so many novated lease firms that are available to assist you. Some of them are trustworthy, while some are not. Check their website to know all the details about them. Most of the reputed firms allow their clients to post a review about their services.
Check the reviews section to know whether it is a good idea to hire them or not. A good firm will answer all your questions with patience. They will explain everything in detail to you.
To find the details of such firms, make use of online directories like Bleen. Continue reading to know about the pros and cons for Novated lease.
- One common misconception regarding novated leases is that you must log a certain amount of annual miles on the road. This is no longer applicable nowadays because the FBT laws have changed in 2011.
- According to the revised law, no matter how many kilometers you drive, the twenty percent Fringe Benefits tax liability rate will be applicable to you.
- However, driving fewer miles will always be beneficial for you when your lease agreement comes to an end.
- Novated lease helps you organize the expenses related to your car well. As you know well about these things in advance, you will not experience any pressure about the daily expenses such as fuel.
- As this lease agreement comes with a fuel card, it helps in tracking your year-on-year fuel usage. This helps both employees and employers in planning the way to save money.
Cons
- It is only meant for salaried people.
Who are eligible for a novated lease?
- You must be salaried, to be eligible for it. Casual employees, whose monthly salary is not fixed are not eligible for it.
- If you have joined a company recently, you must complete your probation period. Otherwise, you will not be eligible for this lease.
- Your employer must provide an option for novated lease to the employees. some companies do not agree on salary packaging.
- Before you apply for a novated lease, know whether your company allows its employees to take a novated lease.
Apply for a novated lease and enjoy driving your favorite car!