Novated leases are something uniquely Australian in the workplace. Whereas other geographies might offer employees different incentives and perks, or the business might put on its own fleet of vehicles, the novated lease has become a hallmark of our workplace industries, particularly with businesses and employees sharing in the benefits.
So why are novated leases popular with employees? Let’s take a closer look!
A novated lease allows the employee a lot more flexibility in the choice of vehicle they get to drive as a work car. Unlike a fleet system, where cars are more or less standardised across the board, employees have their say in what car they drive. After all, not all work cars suit every employee, because there may be advantages involved in having a larger car or one with better access and visibility. Even then, because a car under novated lease can be used for personal purposes, you also have other practical considerations that come with greater flexibility.
You get to pay off the car on the pre-tax component of your salary, which is a real bonus for those in a higher tax bracket.
At the end of the lease agreement, you have the option to own the car yourself if you don’t want to pay off what is outstanding and start a new agreement with a new car. After all, if you’ve come to know and love one particular car, why not? With a novated lease, you also don’t have to stick to just one vehicle. If you like, you can talk to the boss about getting a novated lease for a second car, be it the folks or kids.
A lot of fleet cars require you to keep logbooks and you run the risk of getting into trouble if you lend the car to your other half for the day so he/she can go shopping or off to the golf course. With a novated leases, however, you don’t have to worry about the hassle of keeping tabs of things with a logbooks. You can use the car for private use as much as you like.
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.