Common Myths About Novated Leases
These days, a lot of people feel as though a car is necessary to help them function efficiently.
In addition, it is true that when you have private transportation, you can get to your job faster and even do your job better, especially if it involves sales, meeting clients, or home visits and deliveries.
It is also a safe way to ferry your kids to and from school or take your spouse to the office.
One of the easiest ways to do this is via a novated lease.
A novated lease is a three-way agreement that involves a leasing company, an employer, and an employee.
The vehicle is leased to the employee, and payments are made through the employer who deducts the amount of each payment from his employee's pre-tax income.
This is a simple and equitable arrangement that often benefits all parties concerned.
Yet some people are still hesitant to avail of this kind of lease, mostly because of some misconceptions.
Here are some of them.
1.
Novated leases do not work.
These leases do work, and as proof of that, thousands of Australian workers have managed to own a car of their choice through these arrangements.
They are really very simple, and even result in several tax benefits for the employee along with helping him acquire a vehicle that suits his lifestyle and his needs.
2.
They are only good for people with high salaries.
You actually do not need to be earning top dollar to enjoy the benefits of a novated car lease.
The truth is these leases make payments on a car manageable enough so that you can get a vehicle on terms that are more favorable to you compared to taking out a standard loan or buying the unit outright.
So, even if your salary is not that huge, you can still own the car that you need.
3.
You need to run up a high number of miles to benefit.
You will benefit from a novated car lease even if you only use your vehicle to go to and from the office.
That is because you will already be enjoying some fringe tax benefits, besides paying for your vehicle on easier terms.
If the payments on your lease manage to take enough out of your pre-tax pay, you might even find that you have gone down one whole tax bracket.
This means a lot of savings in the way of income tax.
4.
Novated leases are complicated and not worth the trouble.
These leases are not complicated at all.
Nothing could be simpler in terms of financing a car.
You may even receive discounts on maintenance and tires, and you will get insurance specifically tailored for your situation.
These leases are even transferable, meaning that you can continue making payments on your car even if you change employers.
A novated car lease is actually a good way to help you get a car, so do not let these misconceptions discourage you.
All you need to is to find the right leasing company that could offer you the best rates for you to be able to get the best car that you could afford.
In addition, it is true that when you have private transportation, you can get to your job faster and even do your job better, especially if it involves sales, meeting clients, or home visits and deliveries.
It is also a safe way to ferry your kids to and from school or take your spouse to the office.
One of the easiest ways to do this is via a novated lease.
A novated lease is a three-way agreement that involves a leasing company, an employer, and an employee.
The vehicle is leased to the employee, and payments are made through the employer who deducts the amount of each payment from his employee's pre-tax income.
This is a simple and equitable arrangement that often benefits all parties concerned.
Yet some people are still hesitant to avail of this kind of lease, mostly because of some misconceptions.
Here are some of them.
1.
Novated leases do not work.
These leases do work, and as proof of that, thousands of Australian workers have managed to own a car of their choice through these arrangements.
They are really very simple, and even result in several tax benefits for the employee along with helping him acquire a vehicle that suits his lifestyle and his needs.
2.
They are only good for people with high salaries.
You actually do not need to be earning top dollar to enjoy the benefits of a novated car lease.
The truth is these leases make payments on a car manageable enough so that you can get a vehicle on terms that are more favorable to you compared to taking out a standard loan or buying the unit outright.
So, even if your salary is not that huge, you can still own the car that you need.
3.
You need to run up a high number of miles to benefit.
You will benefit from a novated car lease even if you only use your vehicle to go to and from the office.
That is because you will already be enjoying some fringe tax benefits, besides paying for your vehicle on easier terms.
If the payments on your lease manage to take enough out of your pre-tax pay, you might even find that you have gone down one whole tax bracket.
This means a lot of savings in the way of income tax.
4.
Novated leases are complicated and not worth the trouble.
These leases are not complicated at all.
Nothing could be simpler in terms of financing a car.
You may even receive discounts on maintenance and tires, and you will get insurance specifically tailored for your situation.
These leases are even transferable, meaning that you can continue making payments on your car even if you change employers.
A novated car lease is actually a good way to help you get a car, so do not let these misconceptions discourage you.
All you need to is to find the right leasing company that could offer you the best rates for you to be able to get the best car that you could afford.
