Who is eligible for a novated lease in Australia (Copy)
Yes, you can novate a second-hand car in Australia! While novated leases are often associated with new vehicles, there's no requirement that the car must be brand new. Novating a second-hand car can be a great way to enjoy the tax benefits of a novated lease while opting for a more affordable or pre-loved vehicle that suits your needs.
How Does It Work?
Just like novating a new car, the process for novating a second-hand vehicle involves entering into a three-way agreement between you, your employer, and a leasing company. You choose the car, and the leasing company will finance it. Your employer will then deduct the lease payments from your pre-tax salary, helping you reduce your taxable income.
The only difference when novating a second-hand car is that the leasing company may apply certain conditions regarding the car’s age and condition. Typically, the vehicle should be under a certain age (often no more than 15 years old by end of lease) and have fewer than a specified number of kilometres on the odometer to qualify. It's always best to check with your leasing provider for specific eligibility criteria.
Benefits of Novating a Second Hand Car
Cost Savings: Second-hand cars are generally less expensive than new ones, so you'll benefit from lower lease payments while still enjoying the tax benefits of a novated lease.
Variety of Choices: You can choose from a wide range of used cars that suit your preferences, whether it’s a family SUV or a more fuel-efficient vehicle.
Immediate Availability: Unlike ordering a new car, where wait times can be lengthy, second-hand cars are often available for immediate use, making the process quicker and more convenient.
Important Considerations
Before going ahead, it's important to consider maintenance and warranty factors. Older cars may have higher maintenance costs, and it’s worth checking if the vehicle has any remaining manufacturer warranty. Some leasing companies offer maintenance packages, which can help manage these costs.
If you're interested in novating a second-hand car and want to explore your options, contact us today! We'll guide you through the process, ensuring you get the right car with all the tax benefits that come with a novated lease.