Are you aware of what a novated lease is? We bet you already have a clue because you are interested in this article. For starters, it is a strategy of driving a new car without the tax repercussions. Contrary to initial impressions, a novated lease is readily available for those who want to use a vehicle for personal use, which in turn makes the strategy unique as most other commercial car finance products require the official business use for the car.
If your company offers it, you should immediately grab the opportunity and use an online novated lease calculator Australia. However, if you are not convinced, maybe the reasons we listed below might change your mind.
1 – It reduces your taxable income.
You should know that it is possible to deduct a novated lease repayment from your salary before filing the tax. As a result, you expect a substantial reduction in your overall taxable income in each pay. It likewise is an attractive proposition since you no longer have to wait at the year’s end to claim back your tax from the income tax return.
2 – In a novated lease agreement, your employers will make the repayments.
Another reason why you should consider a novated lease is that you do not have to think about direct debit payments that come from your bank accounts and monitoring if there are enough funds once repayments are due. It is convenient since your employer makes the payments to the financial institution before giving out your salary. Hence, there is no burden in establishing the instalments on your own.
3 – You can save on GST.
Furthermore, know that when the financial institution calculates the rental payments on the GST amount of the car, there is a certainty that you save on this amount. You expect the addition of GST to your rental fees and the employer has the luxury to claim it before paying your salary. In return, it benefits you because it leads to saving on GST on your repayments.
4 – It is a lot more convenient in many respects.
The truth is more and more people welcome the idea of using that novated lease calculator Australia and computing the prospect of this type of arrangement. Well, it is hard to blame them considering how convenient it is when it comes to giving them room for financial flexibility while still achieving the objective of driving their cars. Know that the lease repayments include car maintenance and running costs. Aside from those, other car-related things qualify for inclusion, too, including but not limited to insurance, roadside assistance, servicing costs, fuel, and even the payment for annual registration.
So, if you want flexibility like no other in getting a car, give a novated lease some serious consideration. The fact that so many people benefit from it means you also expect to get the same.