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FAQ
General FAQ: Novated Leasing Explained
Novated car leasing saves you money by bundling ongoing car expenses that you’d usually pay for out of your take-home income into a single lease repayment deducted from your pre-tax salary. This brings down your taxable income, ultimately putting more of your salary into the bank.
1 - Yes, there could be an issue with respect to the lease term you ultimately choose. The ATO set the rules, and the maximum lease term is 5 years. 5 years can be a long time, so perhaps a shorter lease term may be more appropriate to your personal circumstances. This is an important discussion to have with your NCLO consultant with full transparency – that's the NCLO way!
2 - Yes, remember, Novated Leasing is by definition classed as an unregulated or commercial lending product, which means there is no legal requirement to disclose many key facts about your leasing agreement, including your interest rate. NCLO disclose, educate and discuss all key and critical facts around your lease, including the interest rate.
Novated lease holders save an average of $13,000 on their private usage vehicle over the course of 3 years. Right now, thanks to generous government incentives, this figure almost doubles for electric vehicles (EVs).
On December 1, 2022, (back dated to July 1, 2022) the Australian Government introduced an Electric Vehicle Discount in a bid to encourage more people to take up EVs to help the green movement. Now when you lease a new EV (up to the total cost of $84,916) under a novated lease, you won’t have to finance the GST, (up to $5,885), pay Fuel Excise Tax or Fringe Benefit Tax – potentially saving up to $40,000 across the course of a 3 or 4 year Fully Maintained Novated lease!
Employer FAQ
Everyone benefits from a novated car lease. With no liability or out-of-pocket expenses, the business can enjoy savings on payroll tax as well as promoting a rewarding workplace culture based on appreciation and respect for staff. Employees who work for a company offering novated leasing can enjoy a fully serviced and maintained motor vehicle for private use, while pocketing substantial yearly tax savings.
Give NCLO a call to see if novated car leasing packages are the right option for your team. Once you agree to the benefits, we’ll help integrate the procedures straight into your payroll system. It’s cost-effective, seamless, and hassle-free!
Employee FAQ
The main appeal of leasing a motor vehicle is to enjoy pre-tax savings. If you have just financed your new car through a loan before discovering the benefits of novated leasing – or even own the car outright – you can switch to a lease and save. With a new car under finance, we can pay this loan out and then arrange a novated lease for you. If you already own your car, our financier will purchase your vehicle at an agreed market value before leasing it back to you via a fully maintained novated lease. At first, it may seem like you’re losing money by seeing less in your take home pay, but rest assured, with novated car leasing, you will come out ahead!
Your new employer will most likely offer any new staff member the opportunity to transition their existing novated lease agreement over to their new employer. There are some things to note in this situation:
- The transition will be undertaken by NCLO and their nominated platform provider. We’ll require a copy of your current finance lease contract and we’ll need to know your annual kilometres so we can calculate your vehicle operating costs for the remaining term of your lease. We generally don’t charge for this service.