When deciding to purchase a car, a novated car lease program is the best and most cost-effective method. Both you and your employer will enjoy the added benefits and accruals from this arrangement. Novated leases involve an employer, an employee, and the vehicle company willing to lease out the vehicle. The employer will take the obligation of the agreement by having to pay all monthly payments regarding the contract.
Unlike other car lease and loan policies, payments to a novated lease Adelaide are made using an employee pre-tax income. With the other lease policies, payments will be made with the post-tax salary of the employee. Below is a list of major benefits that will accrue to an employee who wishes to take the novated lease policy.
As mentioned earlier that payments to novated lease are made with pre-tax incomes, this helps the employee save on income tax. This is possible since all the fees will be taken from pre-tax salary, thus having reduced tax rate, as opposed to general running costs calculated on taxable income.
Secondly, the value of GST (goods and services tax) is dependent on the lease term. If the lease is for a more extended period and the car’s worth depreciates, the GST will be paid depending on the residual value of the vehicle at the conclusion of the lease. Due to this reason, you will enjoy favourable GST and exemptions on income tax.
Thirdly, independence. Whether you have finished paying your lease premiums or not, you will have absolute total control and use of the vehicle. This means that it is available to you anytime you want to use it. Additionally, you have exclusive rights to determine who drives it
Many people will freak out when they think about associated maintenance costs of a vehicle. However, this is not the case here. With a novated lease policy, you are entitled to vehicle maintenance, repairs, and related inspections. This means that your vehicle will be well-maintained and will always run in its optimum condition.
Another great benefit that is associated with a novated lease Adelaide is the ability to upgrade your vehicle after the lease period is over. You will be granted the opportunity to upgrade to a bigger model that you always dream of. Additionally, you have exclusive rights to the type of car that you want to lease.
For these reasons and many more, novated leases become the best method of leasing a car easily and conveniently.