• The place to find the right expertise and make better decisions
  • Find the right expertise
Sylvia D.
Sylvia D.
Koumala, QLD
1 Likes
0 Followers

Is novated leasing a good idea or is it better to pay a deposit and get finance? Would be looking at a prado, earning over $100000 annual and drive 25,000km annually. What are the problems with novated leasing?
Thanks :)

7 years ago

Responses

Hi Sylvia,
There are good and bad points with Novated Leases. The most important point is that the lease is in your name and your employer pays it whilst you are employed but you must pay the lease and pay the balloon at the end of the lease period if you leave for any reason. As most novated leases are 'fully maintained' and the interest is front loaded they are quite expensive if you get stuck with one personally.
I guess the best rule is "If you wouldn't buy that car with your private money, don't Novate it either"
Best of luck with your new car
Regards
Scott

Novated leasing can and does suitable lot of people, as an alternative to the traditional method of financing a vehicle by way of a car loan paid from your post tax income.
For starters the purchase cost of the vehicle can be significantly cheaper using the buying power of the fleet leasing company.
In addition to the vehicle finance, the ongoing registration, maintenance and replacement tyres can also be factored into the lease payment. The benefit here is that you have cost certainty for the term on the lease, which can be up to five years, so you have your car paid for from your salary before your pay gets to your bank account.
A novated lease is portable so if you change employment during the term of the lease, you can re-novate it to you new employer.
I would be happy to discuss this in more detail and give you some comparison figures so give me a call.
Leon Mcnamara 0411577113

7 years ago

Hi Sylvia I'm not a financial professional by any means but I have a novated lease for our vehicle.
It works well for me not having to budget separately for repayments, fuel, rego, servicing etc. You'd be wise to call and chat with a few leasing companies, that's how I started. They gave me a good idea of what vehicles would be suitable based on my needs/finances etc.
Also think about all the worst case scenarios like what happens if you were to leave your employment or move, ask how they do registration and insurance payments (some include this and some don't), what happens if you can't work temporarily (eg I will be on unpaid leave for a period during the lease).
It's not for everyone but it works great for me. Don't commit until you've got all the information and understand the fine print well.
All the best!

Your Answer

If you wish to include a video or audio response, you can do this by including links to Youtube, Vimeo or SoundCloud (https://www.youtube.com/watch?v=xxxxxxxxxx OR https://vimeo.com/xxxxxxxxx)

<% error.message %>