Novated Leasing - Your Thoughts? - Page 3

jimmyxr6t04 · 09-07-2014, 11:28 AM

My novated lease never changed my hourly rate... If it did, i would have lost out big time when doing OT, and it would have been a huge factor in whether i leased or not.

LooLoo18 · 09-07-2014, 11:38 AM

Im at the end of a 4 year lease ( October ) this is my 2nd lease and will be starting a new one asap
My hourly rate has never changed and when i do an overtime shift 12hrs I get the same as the guy beside me who doesnt have a lease!!

blueoval · 09-07-2014, 12:29 PM

Im currently half way through my lease. The difference with most here is that I am leasing it through my own company, and therefore am getting some tax benefit from it.

If I was working full time with another company, I doubt I would bother as the tax benefits are less just as an employee, but as far as I am aware, there are benefits to those who are directors or trustees of a company who choose to lease, albeit less than before.

Bonn · 09-07-2014, 02:01 PM

Quote:

Originally Posted by blueoval

If I was working full time with another company, I doubt I would bother

If it meant driving a Subaru, I wouldn't bother!

(with all due respect ;-)

blueoval · 09-07-2014, 02:03 PM

Quote:

Originally Posted by Bonn

If it meant driving a Subaru, I wouldn't bother!

(with all due respect ;-)

ease up. I like my Subbie

Bonn · 09-07-2014, 02:11 PM

Fair enough, yours was pre-mating with Toyota, I think?

blueoval · 09-07-2014, 02:25 PM

Quote:

Originally Posted by Bonn

Fair enough, yours was pre-mating with Toyota, I think?

yeah they did with the FT-86/BRZ. Im personally not a huge fan of that car. But credit where credit is due.

Bonn · 09-07-2014, 02:34 PM

I think Toyota already owned a fair percentage of Subaru, pre the joint venture FT-86/BRZ.
Agree strongly, wouldn't lease/buy one, they look distinctively plastic-y

Big_Daz · 16-04-2015, 12:55 PM

Sorry to drag up an old topic, but thought better in here than to start a new thread..

I am about to start a new Job where they give me a Wage + Car Allowance. Just wanting to see if its worthwhile to do a Novated Lease or buy the car with Finance.

I would be keeping the car for 5 years and would do no more than 25,000km's a year... Ive never done this myself before, as the company I am leaving supplies a fully maintained car to me....

Is there a certain KM/Wage point where Novated leasing becomes a clear winner?? Retail of the Car is $44k but when test driving without even starting negotiations she was talking $40k flat driveaway so with some negotiation if I went with finance I would look for $36-37k including Mats and tint...

So I guess the question is, based on the above and with your knowledge/experieve what are your opinion/experiences?

Cheers

blueoval · 16-04-2015, 02:01 PM

Quote:

Originally Posted by Big_Daz

Sorry to drag up an old topic, but thought better in here than to start a new thread..

I am about to start a new Job where they give me a Wage + Car Allowance. Just wanting to see if its worthwhile to do a Novated Lease or buy the car with Finance.

I would be keeping the car for 5 years and would do no more than 25,000km's a year... Ive never done this myself before, as the company I am leaving supplies a fully maintained car to me....

Is there a certain KM/Wage point where Novated leasing becomes a clear winner?? Retail of the Car is $44k but when test driving without even starting negotiations she was talking $40k flat driveaway so with some negotiation if I went with finance I would look for $36-37k including Mats and tint...

So I guess the question is, based on the above and with your knowledge/experieve what are your opinion/experiences?

Cheers

Im still under novation with my car, but I am a company owner and it benefits me tax wise to novate my car both personally and thru the company I own/run. It helps from a tax perspective if you have higher wages. It also helps the company from a tax perspective.

But as a general employee, and if you actually NEED a new car because your old car is stuffed, then novated leasing can work and still have some tax benefits. If you do not NEED a new car and your wages are not as high etc. then novated leasing could be a waste of money and time.

Only your accountant can tell you what's best for you based on your income and other assets you have.

Big_Daz · 16-04-2015, 03:10 PM

Thanks for that blueoval... When it comes down to it, I NEED a new car because I give my current company car back tomorrow when I finish and I cannot really be without a car...

Might have to see if I can find an accountant to go through it with me...

blueoval · 16-04-2015, 03:26 PM

Quote:

Originally Posted by Big_Daz

Thanks for that blueoval... When it comes down to it, I NEED a new car because I give my current company car back tomorrow when I finish and I cannot really be without a car...

Might have to see if I can find an accountant to go through it with me...

I have a guy who is a broker for this type of work too who could offer advice.

He did my documentation with my novated lease and I have no doubt he could help you with yours even though your in QLD.

http://www.tofinance.com.au/about/

Just tell him Shav sent you.

xxx000 · 16-04-2015, 04:06 PM

Just onto our third novated lease and very happy with them.

As stated always refuse the lease company offers of insurance and roadside assistance, just arrange your own.
They make commissions on extras they try to sell you like window tint etc plus prices are high so again arrange your own if you want them

I always buy secondhand cars rather than new.

Great way to lower your taxable income and drive a nice car at the same time

devilcv8 · 16-04-2015, 06:16 PM

See if your new employer will add the car allowance to your taxable salary. That simplifies things if you go the novated lease.

Big_Daz · 16-04-2015, 07:48 PM

Sorry, should have been clearer, a car allowance is involved... I get my salary plus the car allowance

furiousgibbon · 16-04-2015, 08:23 PM

I've got a novated lease on the F6, which was $60k OTR. The way the FBT brackets work now, you get no benefit from doing higher mileage. With 20% FBT, the finance repayments are actually higher than what I would pay on a standard loan. However there is no FBT on the running costs. So basically, if you have a gas guzzler (F6 with heavy foot = yes), and do high mileage (I'm just over 25kkm/year) you will be ahead.

Back in the old days though when that kind of mileage would put you into an 11% FBT bracket, it was like free money. I think my old XR5 cost me about half as much as it would've otherwise.

Careful though, if you have a tendency to change your mind and want to switch cars before the finance is finished, you might get a surprise. I'm pretty sure they calculate the interest for the entire loan period and you pay that upfront, which means if you want out 12 months into the term, you might still owe close to the original purchase price!

There are some secured personal loan offers out there around the 4.9% mark at the moment (citibank is one), so it might be worth looking around and seeing if you'd be better off putting your car allowance towards that.

devilcv8 · 16-04-2015, 09:19 PM

Quote:

Originally Posted by Big_Daz

Sorry, should have been clearer, a car allowance is involved... I get my salary plus the car allowance

I understand that. In a very quick and dirty explanation.....
The car allowance is usually not taxed when paid, but is classed as taxable income. If you haven't or aren't able to get enough work related vehicle deductions to wipe out the car allowance you get hit with a tax bill.
You can have the allowance taxed when it is paid to you which eliminates this risk and subject to how you claim on the car for business use can mean a nice refund at tax time.

SSVPom · 16-04-2015, 09:41 PM

Salary sacrificing for a car ? Go the fully maintained novated lease. Car allowance ? Go hire purchase and sort out all purchasing, running costs yourself. Also as devilcv8 said above, make sure you pay tax on the allowance monthly, as you'll likey get a refund at year end.

Swordie · 16-04-2015, 10:13 PM

I Novated years ago. I like feeling of owning my car out right and not having third party involved. I didn't like the fact it's another financial matter to keep your eyes on.

devilcv8 · 17-04-2015, 06:53 AM

Quote:

Originally Posted by Swordie

I Novated years ago. I like feeling of owning my car out right and not having third party involved. I didn't like the fact it's another financial matter to keep your eyes on.

I've had both novated lease and Telstra operating leases and both suited me at the time. Doing 1000km a week commuting in a novated car allowed me some level of reliability and driving a new car at a reasonable cost. The operating leases I had in Telstra however were absolutely fantastic and would be very difficult to beat. Fixed price lease, all costs included, 1 free at fault accident per year, ability to hand car back and walk away if you leave the job. I spent more on fuel per month than the car was costing me.

xxx000 · 17-04-2015, 07:24 AM

I forgot to mention the mob we go through actually significantly reduced their management fees just after I started my previous lease.

That made it an even better deal for me

**FoxtrotGolfXray 5.0** · 17-04-2015, 09:38 AM

Quote:

Originally Posted by SSVPom

Salary sacrificing for a car ? Go the fully maintained novated lease.

Or even better, a Associate Lease (assuming you already own the car or have the funds to purchase it). Especially if your Associate does not earn much (income splitting, anyone?)

Craig H