What is an novated leasing?
A Novated Lease is a three-way agreement between your employer, a financier, and you as an employee to purchase a car through a lease agreement as part of a salary package. The employee sacrifices part of their pre-taxable income to go toward the cost of your Novated Lease Your employer claims the GST and depreciation and the running costs are also claimed which reduces the amount of fringe benefits tax.
Novated Leasing tax advantages
Novated leasing is an ATO-approved way of reducing tax for both employers and employees. An employee can reduce their pre-tax income with a novated lease which reduced their overall tax payable.
The employer guarantees the monthly payments while the employee can also claim running costs such as fuel, insurance, and servicing as part of the agreement.
Novated Lease benefits
Competitive interest rates
Novated Lease interest rates tend to be more competitive than a regular car loan. You can find cheap interest rates for novated leases through a range of lenders.
Salary sacrificing payments
Your employer will use your salary packaging to make the payments on your new car, which reduces the amount of tax you have to pay overall.
Claimable expenses
You can claim many key running costs on tax, such as petrol, insurance premiums, repairs and roadside assistance under a novated lease.
Use it however you like
Unlike other commercial car finance products, you’re able to make use of the car for private purposes, such as shopping and taking your kids to school.
No GST payable
Because your employer is buying the car, they’ll claim for GST as well as depreciation, meaning you won’t have to pay for these at all.
Fully Maintaned Novated Lease
You can decide if you would like to self manage your novated lease or have your novated lease fully maintained with all costs taken care of by your provider.
Select your leasing term length
As part of your novated lease agreement you are able to choose the term from 1-5 years.
Lease a new or used car
Whether you want to drive the newest models or select a car up to ten years old (or 15 at the end of the lease), we can help you arrange financing.
What's the Yellow Line?
If you benefit from a salary package for a new car purchase, novated leasing is a good way for you and your employer to benefit from a range of tax deductions.
Behind buying a new home, a new car is likely to be the next largest financial decision you will make. There are a vast range of products and banks are extremely competitive. It is best to seek professional financial advise to ensure you obtain the most appropriate home loan product for your needs.
Yellow loans has a vast range of lenders with a range of products to achieve the best results on obtaining the best car loan deals for you. You can contact us here and we can get your future looking bright.
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