Specialist Services to Optimise Novated Lease Deals

Novated Lease agreements with salary sacrificing are extremely popular due to the vehicle lease benefits which may be realised. For employees, the opportunity to purchase a motor vehicle with financing at commercial rather than personal interest rates can represent significant savings over the loan term. Employees can find salary sacrificing an effective way to better manage their spending and budgets with all aspects of the vehicle upkeep and maintenance handled on their behalf. Plus, there is the potential to move into a lower personal tax bracket through salary sacrificing.

Where an individual has a poor personal credit history and an affordable car loan is difficult to obtain, salary sacrificing may provide affordable access to car ownership. Overall, salary sacrificing a car can be extremely advantageous for many employees.

For employers, the advantages can be both tangible and intangible. Businesses can realise the direct vehicle lease benefits with tax deductible leasing payments and vehicle expenses. With the employee sacrificing salary to cover all these costs, the employer is not out of pocket with Novated Lease agreements.

Intangible benefits can include offering this opportunity as an incentive or reward for key employees. Entering into a Novated Lease agreement may contribute to building greater employee loyalty and retaining staff. With the staff member entering an up to 7 year lease term on the vehicle of their choice, they may be more inclined to stay with the business for that period of time.

Using our specialist services, with our access to more than 80 lenders, can deliver advantages in lower interest rate leasing and individually structured vehicle financing. To maximise your advantages from a Novated Lease agreement, speak with Jade.

• Better budget management with tax savings for employees.
• Access vehicle ownership for poor credit employees.
• Purchase cars at commercial (not personal) loan rates.
• Build staff loyalty and improve staff retention.
• Experts source low rates with structure individual agreements.
• Best leasing rates from 80+ lenders.

While the benefits of Novated Leasing can be significant for both parties, there are important factors to consider when opting for salary packaging a car. For an employee, that may include analysing the costs and benefits of salary packaging compared with a Secured Personal Car Loan. We handle all types of car finance and can provide quotes on both options for consideration.

From the employee perspective, the employer may put a limit on the price of a vehicle to meet their cash flow. This may limit the choice of vehicle that can be purchased.

Employees will need to cover all expenses and should allow for potentially higher business vehicle registration and insurance compared with private rates. Fringe Benefits Tax may also apply and that cost will need to be accounted for. A personal car loan may enable the employee to build their personal credit profile while salary packaging does not offer this opportunity.

Both parties need to consider the credit profile of the employer business as they are taking on the lease. If the business has credit issues the lease may not attract the best, lowest leasing rates available.

Salary packaging may entail more paperwork for employers, and they may not be keen to add this workload for the accounts department. While a vehicle under lease is not listed on the business balance sheet, the employer business may have other reasons not to take on finance at this time.

Finalising the residual at the end of the term should be considered at the outset. This amount cannot be paid out via salary sacrificing. Refinancing is an option, otherwise employees may need to fund the residual through savings.

Employees should also plan ahead to the end of the leasing term. In order for a smooth transition of ownership, employees will need to remain with the business until the end of the lease term which may be up to 7 years. They will want to ensure they do have employment stability and salary stability over that period before entering into an agreement.

When choosing the right Novated Lease deal, employees may want to give serious consideration to the term they would like our brokers to negotiate. If they only intend to stay with the business for say a further 4-5 years, requesting that term is an option. But a shorter term will mean higher monthly repayments, higher salary sacrificing and a greater residual.

Your Jade broker will be assisting all parties in choosing the right Novated Lease deals, securing the best rates and negotiating the term that meets individual objectives. Discuss your objectives with us and find out your options.

• Compare Novated Lease with a Personal Car Loan.
• Consider total outlay when salary packaging a car.
• Use our experts to secure the right Novated Lease deal.