If novated leasing is available in your area, it is a great option to you as an employee. Novated leasing isn’t available in all areas and countries yet, but it is gaining in popularity and use. Novated leasing is a great option for anyone who wants to purchase a vehicle, but who wants to take advantage of tax savings while at it.
If you’ve been thinking about taking advantage of novated leasing options, but still aren’t quite sure, let me help you out. Here are the top 5 benefits of novated leasing:
1. Pre-Tax Payments
One of the greatest benefits of novated leasing is the tax savings. This is one of the most popular reasons why people take advantage of novated leasing options. With novated leases, your leasing company will send an invoice each month for your car payments to your employer. Your employer will then pay the leasing company, deducting the amount from your paychecks. But the beauty behind this is that your car payments are made using your pre-tax salary. That means that you could end up paying less taxes. This could save you hundreds to thousands of dollars a year!
2. Easier Approval
Another great benefit of novated leasing is easier approval. Normally when you purchase or lease a car, you have to go through a strict, tedious approval process. But because your payments under a novated leasing contract are made by your employer, you don’t have to worry about a credit check, and your approval doesn’t depend on your good credit history. With novated leasing, your approval depends more on your job stability. The fact that you have a job (and that your company is willing to enter into the agreement that they will make the payments on your behalf) is your grounds for approval.
3. More Options
Another perk of novated leasing is that you are provided with more options. If you are working for a company that offers company cars you may be able to get them to agree to pay a portion of your novated leasing payments instead of you taking a company car. If this is the case, then you may be able to pick out your own car instead of using whichever one the company provides you. Also, you may be able to afford a nicer car using the novated leasing option instead of trying to save up and purchase one yourself, so that will also afford you more options to choose from.
4. More Savings
On top of your tax savings, there are other savings associated with novated leases. Some companies that offer novated leases will offer discounts on fuel prices, maintenance costs, etc, as well as discounted fleet pricing. These savings could possibly add up even faster than the tax savings! You can use the Fleetcare novated lease calculator to see an example of your potential yearly savings.
5. Easier Budgeting
Some novated leasing companies also offer services where they will take care of your refueling costs, maintenance needs, and registration costs. So with these novated leasing companies, you have the ability to easily budget in these costs into your monthly budget. You don’t have to worry about unpredictable monthly expenses to run and maintain your car. You have one set payment every month, and you don’t have to worry about unexpected costs coming up when you don’t expect them and can’t afford them.
Nicole is a writer who has been blogging about saving money and money saving options for years.