Novated vehicle leasing is a three-way deal that allows the employee to drive away with his/her dream car without necessarily making a substantial down payment. It is a deal that involves the financing company, the employer, and the employee. For the employee to take home his/her dream car, he must first approach a leasing company and sign a lease contractor. On the other hand, the employer ensures the observance of all obligations attached to the contracted to the letter which includes making sure that payments are on time. It is also the employer’s responsibility to guarantee that the instalments are deducted monthly from the employee’s pre-tax income.
One of the many benefits of novated leasing deals is that it allows the employee to drive his car at a minimum monthly fee. In most cases, companies include this car benefit into the remuneration package of the employees. Apart from having such a deal as an incentive, this type of agreement benefits the employee when it comes to getting a lower taxable salary. Since the monthly payments are deducted before tax, it means that the employee will take more money home while enjoying the comfort of a private car.
Regarding the car they choose, novated lease deals give employees greater flexibility. The employee has the chance to select the type of car he wants to drive. After a few years, he also has the option to get a new leasing contract and upgrade his/her vehicle into a newer model or buy a car for its residual value. The employee can also choose whether or not to have the servicing, upgrades and maintenance fees included in the lease contract.
The employer also has his share of benefits. For example, allows such deals to the employees’ acts as a great incentive which will lead to increased productivity and this good for business. Also, as a business, one will minimise operation cost as there is no need to buy company vehicles as the employees already have their private cars which they can use for business whenever need be.
If you want an accurate estimate of how much you can save with novated leasing, you can use online novated lease calculator. This online tool allows you to obtain estimates of your savings if you decide to lease a car. Before making a decision, ensure that you use this only tool to be sure you are getting the best deal in the market. Your saving will depend on your monthly payments as well as the value of your leased car. The greatest thing about this calculator is that your data is safe and no personal information like identification is necessary when using it.