Can You Put an Existing Car on a Novated Lease?
If you're considering a novated lease but already own a car, you may wonder whether it's possible to put your existing vehicle on a novated lease. The answer is: it depends on your employer and the novated lease provider.
Most novated leases are structured for new or used cars purchased as part of the agreement. However, some leasing providers allow you to put an existing car under a novated lease, provided it meets specific criteria. Here’s how it generally works:
Vehicle Valuation: The first step is to get a valuation of your current car. Leasing companies will assess the vehicle’s age, condition, and market value. Generally, cars older than a certain age (usually 7 - 15 years) may not qualify for a novated lease.
Employer Approval: Your employer will also need to agree to salary packaging your existing car under a novated lease. Some employers have policies limiting novated leases to new purchases, while others may be more flexible.
Costs and Benefits: Adding an existing car to a novated lease can help reduce your taxable income, just like leasing a new vehicle. You'll also streamline vehicle-related costs, such as fuel, insurance, and servicing, into one regular payment. However, because you're not purchasing a new car, there might be limitations on tax benefits like depreciation.
Maintenance Requirements: Leasing companies often have conditions around the maintenance of the vehicle to ensure it's roadworthy and complies with safety standards throughout the lease term.
Before proceeding, it's essential to check with your employer and lease provider to confirm their policies. If they do allow you to add your current car to a novated lease, it could be a great way to unlock tax benefits without the hassle of buying a new car.
Want to explore your options for novated leasing an existing car? Contact us today to see how you can maximise your tax savings while driving the car you already love!