Novated Leasing

About Novated Leasing

This form of car finance deserves special mention because of its uniqueness. It is unlike the traditional forms of car finance that only involves two parties. We can help you get novated leasing as we have lenders who offer this form of financing. What makes novated leasing quite special is the extent of its coverage. It is not limited to the cost of the lease but other costs that a car owner will normally incur.

It is a salary packaging arrangement that involves three parties instead of the regular two of the lender and the borrower. In a novated leasing, the finance company, the person seeking the finance, and their employer are involved. Through novated leasing, the person seeking finance does not just have access to car finance, but they can also include the car’s running costs, such as the cost of fuel, insurance, servicing, etc., into one package that you can make payments for. A novated lease is very beneficial as it allows you to get the car you want and cover all the costs associated; it is available for all kinds of cars, whether new, used, or an existing car.

Under the novated leasing agreement, the employer will be responsible for all or all the obligations in the agreement. When you use this arrangement, the employer bears the burden of paying for the lease and other obligations in line with the agreement, while the employee will use the car in accordance with the terms of the agreement. In exchange for these payments, the employer will reduce the salary of the employee proportionate to the total cost of the loan. Such a reduction in salary will generally mean less income tax which is expected to benefit the employee financially.

Although the obligations in the agreement are transferred to the employer, you, as the person as the employee and the person benefiting from the finance deal, still have the ultimate responsibility. Thus, if the employer fails to make any payment on the lease, you are expected to make the payments. The same goes for when you take an unpaid vacation.

The validity of a novation deed sustains as long as the person remains employed to the employer, and should the person cease to be employed, the agreement is immediately cancelled, and the obligations that the employer has agreed to bear under the agreement becomes that of the employer again. In this case, a new agreement can be entered into in which a new employer takes up the obligation. The obligations end when the lease expires.

Car dealer showing an offer to his happy clients in a car showro

What novated lease covers include;

Lease Payment for the vehicle

The first thing that a novated lease agreement covers is the cost of the lease. The periodic lease payments are included in the agreement, and the employer will bear this cost in most situations.

Fuel

The number one running cost for any vehicle is the cost of fuel. The novated lease also includes the cost of fuel, which means that any fuel you buy with the leased car will be covered under the agreement. On most occasions, the finance company will give you a fuel card that you will use for this purpose.

Post Purchase Expenses

A car comes with more financial responsibility even after its purchase. Insurance and registration are common examples of these costs. With a novated lease, the finance company will cover the cost of comprehensive insurance on the vehicle. The same goes for registrations, starting from the initial car registration to the annual renewals. The novated lease will cover everything.

Servicing and Repairs

This is another thing that people spend a lot on after purchasing a car. The novated lease agreement covers these costs, which means any service or repairs performed on the car during the novated lease duration will be charged to the finance company account.

Car Accessories

Replacement parts such as tyres, windscreen, car batteries, and many others can also be included under the novated lease agreement. This means that if you ever need to buy any of these items when under the novated lease agreement, the lender will pay for it.

Roadside Assistance

The lender can also cover the cost of complimentary roadside assistance. However, where the car is new, the lender will only do so if the tenure of the novated lease agreement is longer than that of the car manufacturer’s warranty on your vehicle.

Female sales manager giving a car key to male customer in a car showroom

Are you looking to get a novated lease? We can help you with the process. The uniqueness of a novated lease means that not every car finance lender offers this kind of financing. But we know those who do and can connect you to them while also helping you negotiate the best deals. It must be noted that while St Joseph Oatley Transport Brokers does not provide car finance, as car brokers, we partner with lenders who do and can help you with the processes involved in getting finance.

You can use Novated licensing to get cars below the threshold for luxury car tax in value. This amount generally changes annually, and you can check the Australian Tax Office to see what it is at the moment. The value of the car includes the value of accessories, attachments, or parts imported at the same time or supplied with the car. As long as the car you want to get does not exceed the limit, you can easily get it. You can use novated licensing to get new and used cars. In some cases, you can even use it for existing vehicles. Thus, you have several options available that you can try out.

Our transport finance brokerage service is necessitated by what we have observed in the market. Many of those seeking finance do not understand fully what they need and how best to get it which, in most cases, lead to them ending up with a bad deal. By helping you with your financing, we ensure that you have a seamless process from the point you decide to get finance to when you get the vehicle or equipment you want.

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