Why A Novated Lease Is Attractive
A conventional vehicle purchase involves two parties, which are the seller and the buyer. Well, you can also introduce your employer into this relationship. Novated Lease Stratton Finance in Australia entails adding a new party, which is your employer to the purchase contract. It involves paying for your car through a salary packaging, which means that your employer will make the car payments on your behalf. The employer makes the car payments out of your pre-tax earnings.
How does novated lease work?
A typical novated lease contract can last up to two, three or five years. After the period expires, you can trade in your vehicle for a newer model than the one you currently have on a new lease, or you pay a pre-determined buy-out cost, which is known as a balloon payment then you keep the vehicle. A novated lease differs from the usual car finance options in that your car payments under novated lease entail all running expenses. Also, the fees are deducted from your pre-tax salary; hence, you will always be on the benefiting end despite the amount of tax that you pay.
Benefits of a novated lease
One of the most attractive benefits of novated leases is that people pay for the running costs of a vehicle using pre-tax dollars. The other reason why you would consider owning a car through novated leases in Australia is that you enjoy increased purchasing power because you use a fleet company. People who secure novated leases through fleet providers enjoy huge discounts by making use of the purchasing power to get the car instead of buying through a dealer.
Reputable broker aggregators, such as Stratton Finance https://www.strattonfinance.com.au/ offers flexibility such that people can change their cars upon expiry of the lease agreement. Also, the fleet company handles all your servicing requirements on your behalf because the upkeep is included in the lease contract. Novated leasing firms usually charge annual administration charges, and they do most of the maintenance and servicing works after you, and your employer has signed the necessary papers. However, you should beware of leasing companies that take advantage by taking commissions from manufacturers for enticing people to purchase certain cars. Additionally, you can use an online novated lease calculator offered by most companies to get approximate of the kind of a deal that you want. For instance, you can put in your salary, the preferred car model, and your lease term so that you can calculate the exact lease payment and the amount of money you would save.
Novated lease might sound confusing to some people, but it is something anyone would like to try. You can ask your employer about it. A job and job security are essential aspects of novated leases because you can’t access it if you are jobless.