Fincar February 4, 2024 No Comments

Many people are unfamiliar with the concept of novated leases, which creates a problem in itself. That is, because there are a lot of myths around this flexible form of finance. This means that a lot of employees who stand to gain from embracing novated leasing are in fact sacrificing a great opportunity because of the various myths out there. Let’s tackle a few of these.


You need to be earning a big salary to afford repayments

While the most noticeable novated leases (and cars bought on a novated lease scheme) are the ones that involve the latest and best luxury vehicles, this isn’t always the case. You don’t have to be in the top tax bracket to benefit from a novated lease. At the same time, you also don’t have to purchase a luxury car.

The reality, however, is that a novated lease agreement can keep you in a lower tax bracket while still getting rewarded by your employer. As long as you can afford the repayments, you can choose any sort of car under a novated lease scheme, notwithstanding some limitations on the age of the car.

You must travel heaps of kilometres to benefit from a novated lease

It’s often thought of that you need to be on the road just about all day, every day before you can benefit from a novated lease. This isn’t the case. Even if you are using your car just for the daily commute, you can come out ahead. Yet alone any other purposes you use your car for. Here’s something to consider – if you travelled all day, every day for work purposes, the chances are that you’d be issued with a company car anyway.


You can only use the car for work purposes

Under a novated lease scheme, you can use the car for business purposes or personal purposes. Heck, you could even just leave it sitting parked in the driveway! Not that we recommend that of course. A novated lease is like taking out a personal loan for a vehicle except that your repayments are taken out of your pay packet before your boss gives it to you, rather than afterwards.

Once you have the car in your possession, you’re free to do as you please. Just make sure you insure the vehicle, because that’s not included in a novated lease. And one last thing to remember is that you have free reign over which car you want to acquire through a novated lease scheme. Your employer does not have any say in choosing the car, just make sure it is relatively ‘new’ like we mentioned earlier.


The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.