A novated lease is something that people think about with their cars these days. This is an arrangement in Australia where the owners can enjoy tax benefits and also flexibility for both the employees and the employers. By understanding everything about this factor, you can enjoy many things from this option.
Bleen is the one-stop destination for finding everything about the novated lease and also about its benefits for you.
This is an Australian directory that works on connecting people to the right path. You can get all the information on the pros and cons for Novated Lease by visiting this webpage.
Pros of Novated Lease
- The vehicles can be utilised fully for all kinds of personal uses.
- The availability of bulk discounts on all the vehicles is a bonus.
- You can save greatly in GST while purchasing not only the car, but also the add-ons and accessories.
- The pre-tax salary as required for the payment for a new car can be utilised for the repayments.
- The car-running costs can be bundled up with the pre-tax repayments.
- All kinds of car running GST costs can be saved.
- In case of the fringe benefit taxes, PHEVs and EVs are great exemptions.
- You can lease both new and used cars.
- When you plan on moving from one city to another, you can easily move the lease from one owner to another.
- You can enjoy great flexibility at the end of every term of a novated lease.
Drawbacks of Novated Lease
- While choosing the leasing company, you may end up choosing the employer’s leasing company choice as it is mandatory.
- The novated lease option is available only for salaried employees.
- Not many employer services offer this choice to their employees.
- You are not an owner till you complete the lease.
- When compared to all the other finance options, this lease is slightly complicated.
- This lease does not offer enough flexibility for making any kind of repayment.
- All employee benefits are meant to fringe benefits tax, and so is this novated leasing option.
- Not all vehicles are eligible for novated lease option.
- When it comes to moving jobs, you might have to face extra complexities.
- A residual repayment comes with the novated lease every time the lease term completes.
After going through all the pros and cons of a novated lease, one might think that it is not worth it.
However, when compared to the purchasing scale with and without the novated lease option, it is revealed that the buyers can save almost $13,000 while purchasing a new car with cash payment, and almost $26,000 with the car loan option.
With the help of the novated lease option, you can enjoy a great reduction in tax bills. Any item that you pay to buy such as software, traveling, clothing, etc., can be claimed without any need of paying more.
You can enjoy claiming many other things such as charity donations, private hospital coverage, and many more things. The novated lease is the best choice for saving great and spending it in the right way.