Novated Lease

[Kanne]

Is it worth it, does anyone have experience with them?

[mummeeto2]

What are you looking at leasing? Cars I know about as DH has one & we love it.

[Kanne]

Yes a novated lease for a motor vehicle for private use only.

Looking at a medium sized suv/2wd like a ford territory, cx 9, forrester, honda odyssey or similar.

[jag5000]

can't say I know what that even means :o what is it?

[earthfairy]

We have just finished ours for a car...

All i can say is do your maths - work out your sums as if you were going to buy the car outright and only on the KM's you would normally acheive per year.

Beware if you dont meet the required KM's you will be charged a SH1T load of money.

If you use smart salary note they are EXTREMELY slack!

I personally would never do it again.

[mummeeto2]

DH has his through Remserv, I think they only cater for Qld gov employees.

Some of your pre tax & post tax earnings are taken from your pay & held in an account (eg Remserv) for your car expenses. At the beginning, they will work out how much $$ to allocate for car repayments, fuel, tyres, servicing, insurance, rego etc and take out enough to cover the expenses.

The paperwork can take a while to go through, especially the first time.

For us it works well as we don't have to budget for car expenses (fuel is the biggest worry), it's all taken out of DH's pay.

As earthfairy said, make sure you choose the right option for the km's you will travel. Better to choose a lesser amount than have the huge FBT liablity to pay back

[Angelmist♥]

We have our Nissan X-Trail through novated lease and I love it. At first, I was dead set against the idea but now I wish we had have done it sooner. I don't have to worry about fuel, tyres or services now and if we want to go somewhere, we just go. We're on monthly pay though, which made it hard prior to this if we wanted to do something or go somewhere!

[mum2peanut]

We got a Toyota Kluger on lease about 6 months ago. We were just talking about how great it has been. Can't say we really noticed the drop in Dh's pay, but the fact that everything else is covered is great. Never have to worry about having money for services, petrol anything! Love it.
Think our is thru Smart Salary as that is who the DET uses and they've been great so far.
I think they like you to start at 20 000km for your first lease, so just check whether you are able to easily schieve that amount, otheriwse you'll end up doing lots of pointless driving. We just always take that car whenever we go anywhere, and DH basically only uses our Camry for work.

[NewBeginnings]

My parents have been doing it for many years... and have 3 or 4 cars through them. They swear by it and well to be honest it appears so much more stressless! No need to worry about where to pull money for insurance, fuel, tyres, rego... it's all paid pretty much.

I only wish my DP would look into it... but he won't :rolleyes: it would save us so much money.... and mum and dad said something about it reduces your taxable income too? :confused:

[Izy]

Yep... if comes out before tax ;)

[jag5000]

sounds really interesting! could anyone give any kind of ballpark figure ideas of what costs there are? l

[Phezza]

I love having my car under a novated lease, especially after we had DS because I had the freedom to take him places, or get him to sleep in the car, without the worry of petrol prices etc. especially when they were at their peak.

Definately do your sums first. We were also able to organise outside insurance for our car (as it was cheaper than the lease company's), to which we send in our recipts each year for reimbursement. Be awear however, if you get your own insurance, you are unable to utilise the lease companies roadside assist when your car is out of waranty...

I went through Selectus, they have been fantastic and really fast with everything when i have needed it. They were even able to provide me with two fuel cards because we do not have the fuel required for my car in Hobart through the company they utilise.

Novating a car is also really good for the tax part.. and FTB payments :yes:

[Phezza]

sounds really interesting! could anyone give any kind of ballpark figure ideas of what costs there are? l

It depends what you are wanting to get.. my friend just had a Suzuki Jimny packaged, and has around $350 come out of her net pay. I have a WRX and i think i pay around $450 per fortnight.

Also keep in mind.. if you go on leave without pay, then you are still required to make the full repayments (including the pre tax amount). And if you leave your employment and move to somewhere that does not salary package, then you will need to pay the full amount upon leaving (which can be extremely high)

[PunkyDiva]

We are on the last year of a 4 year NL for a Hyundai Getz, new cost around $14 000. Doesn't have to be a new car, we chose one that was excellent safety ratings but extremely cost efficient.
Just over $900 is taken from DH wage each month before he pays tax.
This covers all costs associated with the car but we still keep an eye on costs as we are still paying for it.
Think the mileage has to be 20 000km a year but the company lets you know if you are not within necessary ranges.
We have a $5000 payout figure when lease ends, but there is money sitting in that account that will also go towards this.
I think all up it's $20 000 we put through tax free which covers the NL, rent and some utilities.
The company charges $50 a month for the SS service.
DH works for non profit organisation though so it's a little different to normal salary sacrificing I think.
Centrelink takes into account that we pay less tax so our child payments are reduced too. So I guess you really need to do your figures, but it def saves us money and hassle. An accountant at DH work looks after us but you might need to consult one if you dpon't have access through work.:thumbsup:

[mummajuice]

OK so call me ignorant but do you have a car at the end of your lease, or do you have to hand it back (like radio rentals). At the end of your lease can you then take another newer car or do you have an obligation to buy your current one?? how does it work??

DH is about to go up to a tradesman's wage and we're desperate to look at ways to reduce the tax on his new wage, considering 50% of his hours are overtime.

So does the leasing have to be organised through your employer or can an individual do it??

Also, does this reduction in tax payable also equate to a reduction in "taxable income" for claiming things like CCB and FTB through centrelink??

I kind of knew this existed but didn't know that it could be something we could do!!:fingerscrossed:

[mum2peanut]

OK so call me ignorant but do you have a car at the end of your lease, or do you have to hand it back (like radio rentals). At the end of your lease can you then take another newer car or do you have an obligation to buy your current one?? how does it work??

DH is about to go up to a tradesman's wage and we're desperate to look at ways to reduce the tax on his new wage, considering 50% of his hours are overtime.

So does the leasing have to be organised through your employer or can an individual do it??

Also, does this reduction in tax payable also equate to a reduction in "taxable income" for claiming things like CCB and FTB through centrelink??

I kind of knew this existed but didn't know that it could be something we could do!!:fingerscrossed:

There's a payout figure at the end, depending on the car, I think ours may be around $15 000. So you have the option of paying it out and the cars your, or just getting a new car and keep leasing, or as we are planning on doing, paying it out and selling it to make some money. Obviously depending on what sort of car you get as to whether it would be worthwhile doing that, our car will hold it's value quite well.

I think CCB and FTB are on gross income not net?? I think, don't quote me, so it wouldn't be helpful in that respect.

We about 300 a week, i think, we have a $45 000 Kluger, there was no way we could have afforded to do it any other way. We have a 5 year lease.
Most larger companies have a lease company they work with, but you may still be able to choose a diff one, or you can do it yourself and not pay the administration fees.
Think cars can be up to 5 years old.

[PunkyDiva]

http://www.fleetplus.com.au/novated_leases_why_novate

This is just one of many, many companies but gives you general benefits.

I really would advise seeing an unbiased accountant though, just to ensure you are doing the best for your personal situation.

You have to let Centrelink know a Fringe Benefits amount each year and that is added to taxable ?? income amount for purposes of calculating child benefit payments.

We will pay out the $5000, DD will get the car and DH will start a new NL with a brand new car.
I sorta thought this sucked when I first read about the $5000 payout at the end of the lease, but tax we save over that four years more then negates it.

[Angelmist♥]

Our accountant said we didn't have to tell Centrelink the Fringe benefits because it isn't a benefit kwim?

It won't even show up on DH's group certificate:thumbsup:

[PunkyDiva]

Our accountant said we didn't have to tell Centrelink the Fringe benefits because it isn't a benefit kwim?

It won't even show up on DH's group certificate:thumbsup:


You do have to tell Centrelink about Fringe Benefits such as NL and SS because it def does affect payments from them.
It does show up on end of year tax stuff that Centrelink accesses and crosslinks with now. In the past it could be difficult for them to check but not anymore.

So I would be checking again hun cause otherwise you will get a huge bill to repay and it is fraud. See below link.

http://www.familyassist.gov.au/internet/fao/fao1.nsf/content/getting_started-how_paid-fortnightly-estimate_income-what_family_income-fringe_benefits.htm

http://www.moneybuddy.com.au/car-loans/guide-fringe-benefits-tax.html