FAN found this quote on the Motley Fool Australia website when researching the financial results of the listed fleet management and novated leasing companies.
It highlights the biggest challenge with novated leasing. It sounds too good to be true which can scare people off; and the benefits come from using GST, FBT and marginal tax rates to your advantage which sound complicated.
Novated Leases continue to be the biggest growth opportunity for the company. Smartgroup currently has 65,600 leases under management, out of what they estimate as an addressable market of 1.2 million cars (from an employee base of 1.5 million across its salary packaging customers). This is a significant opportunity, and we don’t see any fundamentalreason why this couldn’t be much higher — novated leases are an attractive product for someone wanting to buy a new car. However, the biggest challenge facing Smartgroup in acquiring these customers remains a lack of education around the benefits and process of novated leasing. Many customers see novated leases as being too complex, and private corporations in particular are not too interested in educating their employees about the product. The company recognises this is an ongoing education process, and has recently been focused on improving its employees’ knowledge of novated leasing, so that they can then be more confident in promoting the product to customers.
The 2021 Novated Leasing Guide from Fleet Auto News is produced to help educate eligible employees on the benefits and savings of novated leasing and salary packaging. Download a copy here.