Do you know the Advantages of Novated Leasing?

Novated leasing has become an more and more convenient, cost-effective and customary method to operate a vehicle. For most people, having a vehicle is not always the very best or least expensive option. A vehicle is really a depreciating asset and can soon begin to lose its value. So, a helpful alternative is novated leasing which has a number of practical benefits.

Listed here are a couple of of the advantages of novated leasing:

1 – This kind of leasing system is made to allow the employer take payments for that vehicle and maintenance in the employee’s pre-taxed salary. This really is helpful for cutting the taxed salary also to lower the tax that’ll be due all year round.

Also, the lease may include added expenses on the top from the primary lease repayment, for example running costs like servicing, registration and fuel. So you’ll be able to depend around the pre-tax salary to cover these day-to-day costs and possibly help lower the taxed earnings further. When any funds put aside for running costs aren’t consumed, there’s the choice to possess these funds came back towards the worker.

2 – For a lot of employers, the choice to provide novated leasing can offer an expense-effective and straightforward approach to add significant value for an employment package. This really is certain to create a company more desirable with regards to staff retention or recruitment.

3 – It’s a practical option to a business managing a fleet that belongs to them vehicles. In case the worker leaves the organization, the lease and future payments or obligations leaves together. This can help to get rid of many of the burden a business needs to manage and keep a lot of vehicles.

So, this can help to get rid of many of the risk put on the organization. The lease agreement instantly gets in a 2-party arrangement between your past worker and also the loan provider.


Past the wide-varying advantages of novated leasing, there’s also a couple of disadvantages of this specific kind of vehicle financing. For example, the tax benefits can differ using the different individuals. It is normally better for that employees around the greater tax bands. You will find lease firms that will which say which dealership can be used as acquiring the vehicle. This could limit the overall selection of vehicle as well as the capability to negotiate the cost. Also, the lease contracts contain a number of clauses that needs to be read and fully understood before you take things further.

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Jackie Delatorre

Jackie Delatorre