Planning to buy a car? What does it cost to run? Do you already own a car?
Did you know that you could end up with more dollars in your pocket with a novated lease versus paying cash? It’s true! Novated Leasing is a great way to save money by salary packaging a vehicle.
All you need to do to take advantage of this legal (and easy) way of reducing your tax bill is to work for a company that offers salary packaging as an employee benefit.
What’s the difference between a novated lease versus paying cash and owning a vehicle?
The first thing is the running costs are paid from your salary before the tax is taken out. This reduces your income which also reduces the tax you pay.
What do we mean by running costs?
Well the obvious one is fuel. You also have servicing, finance costs and insurance. When they are included in the lease, the financier claims the GST input tax credit which is like you getting a 10 percent discount. And with a novated lease all the expenses are combined into one monthly rental which makes budgeting easier.
Sure, it’ll take some time to get your head around the benefits. But do the research. Take the time and you’ll thank us.
There’s plenty of information online, including calculators that will detail the savings. Just research novated leasing on the web and start from there. Or talk to your HR people.