Novated Leasing In 2022 _ Are They Worth It

Novated leasing is one of the most tax effective ways you can buy a car in Australia. There are multiple ways you can save and a novated lease can provide simplicity and ease during the car ownership journey. However, there still isn’t enough known about novated leasing and too often, the question is asked, is a novated lease worth it in 2022? 

We are going to cover the top reasons you should get a novated lease and the main ways you can save when buying your next car. 

  1. What Is A Novated Lease?

A novated lease is a three-way agreement between you, your employer and a leasing company. You agree with a leasing company on a car to buy, how many kms you will drive each year and general running costs then, once agreed and you purchase the car your employer will deduct money from your salary each pay and send it directly to the leasing company. Then the leasing company pays your lease payment, and puts money aside to cover your fuel, servicing, tyres and all running costs. It is that simple!

  1. GST Savings

One of the key benefits and savings you can get from a novated lease is GST. There are two ways to save with GST. First, if you buy a new car from a dealership, you won’t pay GST on the purchase price of the car. This means a huge saving of 10% off the purchase price of the car straight out of the gate. As a consumer, there is no other way you can save GST on the purchase price of a car. 

The second, are the savings you can get from the GST on your running expenses. When you have a fully maintained novated lease you can save the GST via an input tax credit further driving the savings compared to a traditional payment method. 

  1. Simplicity 

Once set up a novated lease can be one of the easiest ways to buy, maintain and own a car. A fully maintained lease means the lease is managed by the leasing company. Your employer pays the leasing company out of your pay in one lump sum which is then budgeted to cover everything you need to keep your vehicle on the road. From fuel to car washes, one payment that covers all things. 

  1. Buy Any Car

With a novated lease, you can buy any car you like. New, used, dealer or private sale, you can buy whatever you want. There are age restrictions that vary from leasing company to leasing company which usually limit the car from being older than 12 years at the end of the lease. Plus, the car needs to be a regular passenger vehicle with a payload under one tonne. 

There are many other features and benefits when you buy a car with a novated lease however when you ask the question, should you consider a novated lease in 2022? The answer is 100% yes. 

TIME BUSINESS NEWS

TBN Editor

Time Business News Editor Team