Many businesses these days allow their employees to have a Novated Lease on a car as part of their employee benefits.
It’s touted as being tax efficient and “the way to go” when purchasing a vehicle. People should always obtain advice if they don’t fully understand what they are being quoted by the leasing company as there are a number of traps for the unwary.
Here are a few to consider:
As a recent example, a client recently asked me to look at a novated lease quote for her as she was struggling to understand what had been provided by way of facts and figures. Upon investigating, we found that the lease included over $4,000 of point of sale insurance premiums, a documentation fee of $500 and finance brokerage of $4,000. Note: it took over 15 emails to the leasing company to get them to provide the information!
The actual financed amount was over $8,500 more than the vehicle purchase price, meaning a very large increase in the novated lease package cost per fortnight (compared to not taking up the insurance and obtaining a more competitive finance lease).
Remember to fully research any finance arrangements you are contemplating and ensure you seek impartial advice if there is anything you don’t understand.
The devil is in the detail.
To discuss the information detailed regarding vehicle leasing, give the team at Steve May Financial Services a call and start a conversation today.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
Shanley Financial Planning Pty Ltd trading as Steve May Financial Services (ABN 19 612 825 180) is a Corporate Authorised Representative of (1265706) of Sensibly Pty Ltd (AFSL 533923)
Nick Shanley, Steve May and Luke Styles are Authorised Representatives of Sensibly Pty Ltd (AFSL 533923)