It may sound like one of those things that your accountant says that will bore you to death, but novated leasing is something you would want to pay attention to. It’s an investment that’s worth your time and money. In this article, we’re going to talk about the essential things that you should know about novated leasing and why going for it may be the best decision you’re going to make in your life.
Purchasing a new car traditionally involves two parties: the buyer and the seller. However, with novated leasing, you can introduce person number three into the mix – a “third party” if you may. That person is going to be your employer, and we will discuss his purpose in a while after we’ve introduced the concept of novated leasing.
What is Novated Leasing?
The idea of paying for something you don’t truly own might put you off and make you think that this is all a scam. However, let me guarantee to you that it’s not. Most people believe that buying a new car directly will save you more money – but it won’t. Let me tell you why.
Why Traditional Car Purchase Is Less Beneficial
When you purchase a new car, unless you’re wealthy, you would most likely loan money to do that. A regular loan is paid using post-tax salary, which pertains to whatever is left in your bank account after you’ve settled your taxes. A novated lease, in contrast, is paid before your tax.
Now let’s go back to your employer. Now as said earlier, a third party is introduced in the form of your employer to complete the people involved in your purchase agreement as part of your novated lease. Novated leasing is when you pay for your vehicle through salary packaging. That means your employer pay your car payments for your convenience, out of your pre-tax earnings. Pretty convenient, right?
How does it Work?
Novated leasing involves an agreement that lasts from two to five years. After the deal has come to its final year, you will have the option to trade in your care in exchange for a newer model, where a new lease contract will also be in place. See the benefit there? Novated leasing allows you to have a new and updated vehicle. Instead of buying a new car that will only become outdated in a matter of two years.
Go For Novated Leasing Now!
With a novated lease, you can earn the benefits of having a new car every five years, along with the perks and insurance, plus you get your employer to pay your new vehicle for you! That’s a win across all borders! So choose novated leasing, and you’ll never regret your decision.