Congratulations: your boss just agreed to a salary sacrifice deal, and now you’re going to get a great new car and the company you work for will take care of the lease payments. You’re finally getting that recognition without going over into a higher tax bracket, and the fact that your boss has committed to this novated lease for the next however many years it is means that they are going to keep you employed for at least that amount of time, all going well.
One of the great things about salary sacrifice leases is that you get all the benefits of a company car (they take care of the repayments and the maintenance, for example, and even the fuel in some situations) but without the drawbacks. You see, with a company car, the business’s vehicle fleet might be mostly little urban hatchbacks – great for round the town and all that – but if you’ve got three kids, all of whom play sports involving gearbags and have several friends that need to be picked up now and then, and you’ve got a dog, then a little hatchback is barely big enough to bring home your weekly shopping, let along doing the school run.
Under a salary sacrifice package, you get to choose the car, just as if you were buying a new car for yourself. This means that you can choose something that suits your family situation and your needs.
Before you head off to the car sales yards and/or sign on the dotted line (electronically or with a real pen), then maybe you should think about your options. There are so many cars out there, and they’ve all got different descriptions, so how are you going to narrow down your choices when you start looking at options?
To help you with this matter, as well as in setting up your salary sacrifice deal (aka a novated lease), we’ve put together a quick glossary of vehicle styles that are suitable for the typical Aussie family, dog and all.
Salary Sacrifice Car Glossary
SUV. SUV stands for “sports utility vehicle”. When these first were launched onto the Australian automotive market over 20 years ago, this term was a bit more meaningful. It generally referred to something that had more ground clearance than your average suburban runabout and maybe had all-wheel drive but wasn’t a full-on 4×4 bush-basher. And they tended to be a bit less rugged-looking than your offroad vehicle, or at least a somewhat more polished version of rugged, kind of like a back blocks stockman all scrubbed up for a Friday night date. Today, however, quite a lot of vehicles have AWD (all-wheel drive) and are described as SUVs. Modern SUVs come in large and small versions, so read the description of whatever you’re thinking of and maybe check it out in the flesh (metal?) to see if it suits you.
MPV. MPV stands for “multi-person vehicle”. These are also known as people carriers or even minivans, although minivans tend to be at the larger end of the spectrum. MPVs tend to have more than your typical seating layout of two seats at the front (bench seats at the front are so yesterday!) and three at the back. They tend to have an extra row of seats, meaning that you can seat six or seven people. The third row of seats (that’s the back) tends to fold flat if you need to take extra gear. It’s a good idea to check how the doors operate on these, as this can make a difference to how you get things in and out if your children are younger.
Van. Vans are like MPVs in that they have more than two rows of seats. However, vans tend to be bigger than MPVs and have more of a commercial feel and look about them. An MPV, however, looks like your typical car except its larger and longer. Vans can also be built to carry cargo rather than people, so choose carefully.
Ute: A ute is what gets called a light truck or a pickup in other countries. A ute has an enclosed cabin or cab for the human passengers (and the dog, if it’s lucky) with climate control, sound system and seatbelts, while the deck on the back is more open to the elements, even if it’s got a canopy over the top. Think of your typical farmer coming to town vehicle and you’ve got the general idea. Twincab utes are usually built to take a maximum of five people (and some older versions have bench seats to fit in six), with the dog and the luggage going on the deck.
Stationwagon: Called an estate car in other countries, a station wagon has your typical layout of two seats in the front and three in the back, with the boot compartment being accessible from the main body of the car (unless you install some sort of barrier, which is possible). This is the main thing that separates it from a sedan/saloon vehicle, in which the boot is its own separate compartment. The boot of a stationwagon is more suitable for transporting a dog (or even sheep) than that of a sedan.
Hatchback (maybe): A larger hatchback is very similar to a stationwagon, except the roof tends to be higher, the boot is a bit shorter and the overall styling tends to be chunkier. Hatchbacks come in sized ranging from small to larger, with the larger ones being described as five-door hatchbacks. If you’re wondering how a car can have five doors, it’s because the thing that opens so you can load the groceries and the gym bags into the boot counts as a door.
No matter what sort of car you are thinking of for your salary sacrifice deal, it’s wise to have a good look around before you finalise the lease. And if you know that you’ll need some modifications such as roof racks or towbars, then talk to our team at the start so we can factor this into your package.