Pay less tax, save money and drive a better car. All this is possible – with a Novated Lease. So if your employer allows car repayments to be made from your pre-tax salary, it’s time for you to learn how it all works.
Getting startedYour first step towards a Novated Lease is to decide three things:
1. New or used vehicle?If you are looking for a new car, you can purchase the vehicle yourself – or you can leverage ORIX’s buying power via our national Preferred Dealer Network. If you opt to buy a used car, the car cannot be more than 10 years old or exceed 200,000kms by the end of the lease term.
2. What length lease term do you want?:Your term can be anywhere from one to five years.
3. Your residual percentage:The amount owing at the end of your lease will depend on the lease term you choose (according to ATO guidelines).
Choose a quoting methodA Novated Lease can be quoted using three methods:
- Employee Contribution Method
- Statutory Method
- Operating Cost Method.
Setting up your finance and budgetWhen setting up your finance, it’s important to know that the amount you borrow is equal to the drive away purchase price of your car minus the GST (up to a maximum of $5,234.64).However, if the price of your car exceeds the Luxury Car Tax ($57,581.04) limit set by the ATO, GST will apply to the amount above this limit. Next, you’ll need to set your monthly Novated Lease budget – with our help. Your budget includes running costs such as fuel, maintenance, tyres, registration and insurance. And you won’t pay GST on these costs either. Once again, you can take advantage of our Preferred Dealer Network to receive discounts, such as:
- 35-40% off tyres
- 20-25% off maintenance
- Up to 2-3c off fuel per litre.