Car Lease Adelaide: What is a Novated Lease?

Car hire Adelaide agreements are agreements between you, your employer and a financier to share the costs of purchasing and operating a vehicle together – it’s like salary packaging but with fewer tax consequences!

Novated leases enable your operating costs, such as fuel, maintenance, and insurance premiums, to be automatically deducted from your pre-tax salary on an even basis, potentially saving thousands in taxes.

Save money on tax.

Car hire Adelaide payments differ from regular car finance in that they’re made from your pre-tax salary (known as salary packaging) rather than after-tax – potentially saving you money in tax and GST charges, saving thousands upfront.

With ECM’s help, any fringe benefits tax (FBT) payable on your novated lease is handled for you, so you won’t need to pay it out of pocket. The FBT rate applies to your package cost, including lease payments, running costs contributions, servicing/registration/insurance fees, etc.

With all your car-related costs combined into an easy, manageable payment, you’ll experience peace of mind knowing your costs are covered – leaving more time for what matters – like driving the vehicle of your dreams!

Get a new or near-new vehicle.

Novated lease is an arrangement that enables employees to purchase vehicles by effectively forgoing some of their pre-tax salary. A car is then leased from a finance company for an agreed term; at its completion, either paying its residual value and taking ownership or renewing the lease agreement are options.

Unlike buying, leasing a vehicle doesn’t require a deposit payment, as novated lease payments are spread evenly over its lifespan. Furthermore, providers like Novated Lease bring significant buying power by negotiating discounts with car manufacturers, allowing them to pass savings to their customers.

Car hire Adelaide also simplifies budgeting by consolidating running costs like fuel, registration, primary services and insurance premiums into one monthly payment, helping reduce bill shock when registration renewals, service bills or premiums come due. Finally, these novated leases can benefit almost anyone needing a car. They’re an excellent way to lower taxable income; fringe benefits tax might apply, but the burden often remains significantly less than paying expenses individually.

Get the car of your dreams.

Finding your dream car can be intimidating, so make sure you make an informed decision and find one within your budget. Be specific in defining exactly which kind of vehicle you desire. Doing this will allow you to fully appreciate its significance while ensuring it meets all your requirements.

Utilising a novated lease to acquire your next car can help ensure you find exactly what you’re searching for without incurring additional hassle or expenses. Novated leasing consolidates all of the costs related to driving the car you want into one convenient payment that is deducted directly from your pre-tax salary each pay cycle; this covers everything from financing, registration, fuel costs, servicing and replacement tyre costs as well as replacement tyre replacement.

Novated leasing provides many cost-saving advantages over buying outright, including fleet discounts, GST savings and reduced taxable income – making it one of the most economical ways to acquire a vehicle. For more information or assistance in setting up this agreement, please reach out and give us a call, and let us guide you through it all.

Please take advantage of our dedicated car concierge

Novated leasing is an innovative form of car finance that could save you thousands in taxes if it’s the right solution. However, as with any financial product, you must consider its advantages and disadvantages carefully.

Novated leases are three-party arrangements between you (or your employer if salary packaging your lease), a fleet provider/finance company and themselves. A novated lease company pays for your car from pre-tax income, which reduces taxable income. Furthermore, these companies claim back GST charged against its purchase price before passing it back at an ex-GST rate to you as part of their agreement with them.

After your novated lease agreement, you have several options for returning it: trading it in or selling it with its residual value paid off and using its proceeds towards another lease or purchasing outright. When fully maintained novated lease arrangements are implemented, before-tax savings on costs such as service and maintenance, tyres, fuel, rego fees and CTP (NSW) insurance policies may be realised.