What Is A Novated Lease?
Benefits packages come with many different aspects depending on where you work. Some companies offer retirement and savings packages, others offer living expenses, and some even offer bonuses and great health care. It all depends on where you work, where you live, and what you want most in a benefits package from your employer. In Australia, many employees are offered another great incentive that helps them save money and buy a new car at the same time. It’s called a novated lease package, and it’s good news for many people. If you’ve never heard of a novated lease, you’re not alone. It’s time to learn what it is and how it works.
What is a novated lease?
A novated lease, such as the ones offered by www.strattonfinance.com.au/novated-lease is a type of car payment assistance. Your employer offers a novated lease package that allows you to lease a new car with the company signing the lease. The company then pays the novated lease payment for you each month out of your income. This benefits you because it’s one less thing to worry about. While the money used to pay the novated lease payment is your own, someone else is writing the check to the lease company, and all your maintenance is paid for with that money.
Why should I bother with a novated lease?
This kind of lease program is great news. Not only do you never worry your lease payment is late or forgotten, which can negatively affect your credit, you also save money when you buy a car Mazda Finance by Stratton this way. How? Your company uses your pre-tax income to pay the car payment. In fact, many people who lease a car with their company end up with a higher paycheck every pay period when they go this route.
When your pre-tax income is used to make your car payment, it lowers your taxable income. Your employer then takes fewer taxes out of your income, you owe less money, and you sometimes get just a little more money each pay period because your tax rate is so much lower.
If you’re in the market for a new car, a novated lease is a great option in Australia. You reap so many more benefits than you imagine, and it’s also a great concept for other reasons. You can use the car however you please, and it’s not regulated by your company. It’s not a company car. It’s your car, but your employer is only guaranteeing your payments are made. You drive it as you see fit.