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Home Blog Sydney Car Loan: Benefits of Novated Car Lease

Sydney Car Loan: Benefits of Novated Car Lease

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If you are in full time employment and in good terms with your employer, you may want to consider getting a new car by way of novated lease. The term for novated lease, which is quite a common practice in Australia, is a method where employers lease cars on behalf of their employees, and repayments are made against employees pre-taxed salary.

Here are some of the benefits if you are choosing to go this path

1. It will reduce your taxable income

This benefit attracts most of the full time employees in getting a new car. The leased car repayments are taken from your pre-taxed salary, which automatically lower your taxable income. Unlike other methods, where car owners need to wait until the end of financial year in order to claim your tax return.

2. It can include on going costs into your lease term

With novated lease, you will be able to include on going costs into your lease package agreement. On going costs such as fuels, car registration, insurance, as well as car maintenance costs can be included in the lease terms, making it more convenience as you do not have to think about these costs.

3. Your employer will make the repayment on your behalf

Your employer is leasing the car on your behalf, so on every pay day, monthly or bi-monthly, your car repayments will be deducted from your gross salary before credited into your bank account. This is to ensure that there is no missed payments because, well, you simply forget.

4. When you leave the company you are able to take the car with you

Unfortunately, every job will have to end. If you decide to leave the company for any reasons, you will be able to take the lease car away with you and continue to make the repayments to retain your leased car. This is different from using a company car, where you do not own the company car at the end of your employment contract. For you convenience, you can also apply to have your Novation Agreement to be transferred to your new employer.

Ready to get your dream car financed? Give our friendly Sydney Car Loans office a call on 1300 856 846.