Time to upgrade or buy a new car? Want to do it with tax-free dollars?
If you are considering a new or late model car, a novated lease could save you thousands in acquisition and on-going running costs.
This benefit is in addition to your standard salary packaging limit, enabling you to save even more tax each year!
What is a novated lease?
A novated lease is a three-way agreement between an employer, an employee and a vehicle leasing company whereby the employer deducts regular lease payments from the employee’s gross salary. Because these payments are made with pre-tax dollars, the employee can save a substantial amount on the vehicle costs.
A novated lease term is usually between two and five years and payments are made on a monthly basis. The vehicle is registered in the name of the employee and is the financial responsibility of the employee.
What is included in novated lease packaging?
With a novated car lease you are able to pay for the total running costs of your vehicle with pre-tax dollars, including:
- Repairs, maintenance and tyres
- Roadside assistance membership
You are also able to salary package the car of your choice, including the make, model and colour.
The ability to enter into a novated lease agreement will be determined by your employer’s salary packaging policy, so a good first step is to so check your eligibility with your pay office. You should always seek independent financial advice on the tax effectiveness of a novated lease and whether it is right for your personal circumstances.
The advantages of novated leasing
Want to know more?
StreetFleet is CBB’s carefully selected novated lease provider. When making your purchase, you will benefit from Street Fleet’s buying power, saving you even more! Read more about StreetFleet here.