When it comes to novated leasing, there tends to be a lot of information thrown about – and not all of it is true. From the fees you pay to how the system actually works, it’s easy to get swept up in tidbits of knowledge that don’t actually give you the full picture.
That’s why we thought it’d be a good idea to take a look at some common myths surrounding novated leasing – and get down to the reality of it. The truth is out there, and now it’s right here for you.
Myth: You have to buy a new vehicle with a novated lease
There’s a lot more variety to novated leasing than just buying a new car. You could refinance your current car, conduct a private sale for a used vehicle, or sale and lease-back a vehicle that you own outright. There are so many more options than simply buying a vehicle outright.
However, we should note there are a lot of benefits you get when you do buy a new vehicle with a novated lease. More on that below.
Myth: The tax benefits aren’t worth it
Whoever says this must love paying tax. Novated leasing is the only product of its kind where you can repay the loan before your income is taxed. By using a loan where you make repayments before the taxman gets to it, you’re making instant savings.
Additionally, you won’t pay any GST. This means that rather than buying a $40,000 car from a dealership and paying the full amount, you’ll save several thousand dollars by avoiding GST. This applies to running costs as well, such as insurance, maintenance and even fuel. It’s essentially a blanket discount on everything!
Myth: Novated leasing is too complicated for me
Handling the entire novated leasing process yourself might be difficult, but with Alliance Leasing, we take on all the hard work. Whether you bring a car to us or we source one for you, we’ll then present an itemised quote of all the ongoing costs, how much you save in tax and how much comes out of your pre-tax salary.
What’s more, we can start and finish the process in two days in a lot of cases. It is transparency and efficiency that makes your workload seem like nothing at all.
Myth: Novated leasing is only worth it if you drive a lot
In the past, the more kilometres you travelled the more you could benefit from a novated lease. However, with reward came risk and huge financial consequences if you did not reach your nominated kilometre requirements. In 2014, these requirements were abolished on a national scale which means there will be no more or less to pay, no matter how far you drive.
It doesn’t even have to be for work use. A car bought with a novated lease is 100 percent yours to do with as you please. The registration, loan and insurance are all in your name. Your novated lease means your own car!
See how simple it is? If you want to know more about the process or want to start reaping those benefits, don’t hesitate to get in touch with us here at Alliance Leasing.