Novated Lease at Downtown Toyota

Benefits of a Novated Lease

When it comes to a novated lease, there is a vast array of benefits, including:

• Pre-Tax Repayments – The repayments you make are partly sourced from your pre-tax income, meaning there is a possibility of paying less tax and having more disposable income.

• No GST Payments – With a novated lease, there is no GST added to the purchase price of the car, which in turn could save you thousands in upfront costs.

• Budget Convenience – One of the popular reasons people tend to purchase a car with a novated lease is the ability to have your running costs deducted from your pay and spread out over the year. Things like registration, servicing, and insurance are covered and can align with your pay cycle.

Types of Novated Leases

There are a couple of types of novated leases available when it comes to financing a car:

Fully maintained novated lease

This type of lease is one that is maintained by a third party, who can also assist with sourcing the car, negotiating the price, arranging finance, conversing with the mechanics that maintain your vehicle and creating a budget for your running costs. Most people tend to select this option as it allows peace of mind and you can go about your day knowing that when it comes to your car, things are taken care of.

Self-managed novated lease

This type of novated lease is one where you are in complete control. You handle everything from start to finish (vehicle sourcing, financing etc) and when it comes to maintaining the vehicle itself, you take full responsibility when it comes to ensuring your vehicle is being looked after by trustworthy professionals.

What happens at the end of a novated lease?

There are a few things that can be done once the lease ends. They are:

1. Pay the residual amount – Once the lease has ended, there is a residual amount that is left over that you will be required to pay if you wish to purchase the car then and there.

2. Trade in your car – Use the money you acquire from the trade in to pay off the residual amount and then enter in a new novated lease agreement to purchase a new car.

3. Re-leasing your car – This is when you enter a new lease to pay the residual amount that is left over from the original lease.

4. Sell your car – Sell your car and use the money to pay off the residual amount left.