Benefits of Novated Leasing

Novated leasing is now an increasingly convenient, cost-effective and common strategy to run a vehicle. For many people, buying a car isn’t necessarily the best or least expensive option. A car can be a depreciating asset and can soon begin to lose its value. So, a handy alternative is novated leasing which comes using a variety of practical benefits.

Here are a handful of the advantages of novated leasing:

1 – This style of leasing product is designed to allow the employer take payments for that car and upkeep from your employee’s pre-taxable salary. This is a good choice for cutting the taxable salary and lower the tax that will be due all year round.

Also, the lease normally include added expenses over the main lease repayment, for example running costs like servicing, registration and fuel. So it is possible to depend on the pre-tax salary to fund these day-to-day costs and maybe help lower the taxable income further. In the event that any funds schedule for running costs aren’t worn-out, there is a option to have this money returned on the employee.

2 – For many employers, the substitute for offer novated leasing can supply a cost-effective and straightforward method to add significant value in an employment package. This is sure to make a company more desirable when it comes to staff retention or recruitment.

3 – It is often a practical solution to a company owning a fleet of his or her vehicles. In the event the employee leaves this company, the lease and future payments or obligations will leave using them. This helps to get rid of a lot of the burden a business has to manage and gaze after a large number of vehicles.

So, this helps to get rid of a lot of the risk placed on the organization. The lease agreement instantly transfers to a two-party arrangement relating to the past employee and also the finance company.


Beyond the wide-ranging benefits associated with novated leasing, in addition there are a few disadvantages in this particular kind of car financing. For instance, the tax benefits may vary with the different individuals. It is typically more favorable with the employees within the higher tax bands. There are lease firms that will which say which dealership bring purchasing the car. This can limit the final choice of vehicle along with the ability to negotiate the retail price. Also, the lease agreements contain a various clauses that needs to be read and fully understood prior to taking things further.