FAQs About Novated Lease
Novated lease is one of the topics that can be challenging to understand. It has gained popularity over the past few years, but it is still a subject with a big debate. Novated lease is also known as salary sacrificing, and it offers employees a cost-effective solution to buying a brand new vehicle. The contract is usually between an employer, the employee and the finance firm, and it comes with an array of benefits such as money-saving benefits. The leases benefit not only the employee but also the employer because the employer is relieved the burden of managing a fleet of vehicles and offers reduced and freedom from income tax.
Am I eligible for a novated lease?
A person should be employed to qualify for a novated lease https://www.strattonfinance.com.au/novated-lease which means that you must be getting a wage as well as paying tax through the PAYG system. All the three parties should be present during the signing of the agreement. Therefore, since you are not on probation with your current employer, and your employer is happy to get into the lease agreement, you are eligible for a novated lease.
Must I be a high-income earner?
There is a common myth that novated leases are only for high-income earning employees. Well, that is not the case because the agreement is suitable for any employed person regardless of their income. You can enjoy the benefits of the lease agreement through the Fringe Benefits Tax (FBT).
Is novated lease only for new cars?
People take advantage of acquiring new vehicles with novated leases, but that doesn’t mean that you can’t buy an old car. However, the contract is only applicable to vehicles that are three years or older. The novated lease gives you the chance of choosing the car model that you want as well as select between a new and old car.
What is included in monthly payments?
A novated lease does not only include the car model you desire but also other extras that contribute to the savings. Fuel costs are included in the contract where employees get a fuel card so that they can enjoy cashless driving because fuel costs are included in the monthly payments. Other extras included in a novated lease include insurance, batteries, windscreens, and repair and maintenance. The monthly payments also include car registration and roadside help.
How much can I save?
Novated leases by Stratton Finance https://www.strattonfinance.com.au/ give employees the opportunity to save a lot of money because you take advantage of the pre-tax savings. The contract can save you thousands of dollars. However, the exact figure depends on various aspects such as the car you want or your income. A novated lease calculator can help you break down the savings and expenses.