Car Leasing Guide: What a Novated Car Lease Is
It's usual that we hear about a car lease and how different it is from car buying, but we don't hear a lot about novated car leasing.
To start off, let's define the term. A novated car lease is that financial agreement between an employer, the employee (who is the car user), and the financier. It is some sort of a salary packaging wherein the employer agrees to be responsible for the obligations of the employee under the lease, paying the monthly lease payments thru the employee's pretax income.
As the employee, you can own the car and have the right to take it when you change jobs. You can even get a great discounts for the package deals with a novated car lease.
Here are some of the advantages for you as the employee:
- You have a variety of choices to choose from.
- You can pay the car with pretax dollars.
- You can buy the car at the end of the lease.
- You can lease the car 100% for private use.
- Your employer can allow you more than one car for a novated car lease.
If you happen to be an employer, these are the advantages you will be getting:
- It is a hassle-free and cost-effective plus factor for an employee's salary package.
- The responsibility of the car ends upon the termination of the contract.
- You are not liable for the management of the car.
Sources:
https://www.privatefleet.com.au
https://www.strattonfinance.com.au
