The Road Less Taxed: Unlocking Savings with a Petrol Car Novated Lease

In today's economy, where every penny counts, finding efficient ways to save on expenses is crucial. One often overlooked method is the utilisation of a petrol car novated lease. 

This financial arrangement can significantly decrease the cost of owning a car by combining the benefits of leasing with substantial tax savings. 

For those curious about maximising their income while enjoying the perks of a new vehicle, understanding how a petrol car novated lease works is essential.

What is a Petrol Car Novated Lease?

A petrol car novated lease is a three-party agreement between an employee, an employer, and a finance company. 

Essentially, the employer leases a petrol car on behalf of their employee, and then the responsibility for the lease is transferred to the employee, who pays the lease amount out of their pre-tax income. 

This setup can lead to considerable tax benefits while making getting a new car simpler and more budget-friendly.

Benefits of a Novated Lease

1. Tax Savings: By paying for your car lease pre-tax, you can lower your taxable income, resulting in significant tax savings.

2. Budget Management: Consolidating car expenses into one fixed monthly payment, which includes costs like insurance and maintenance, simplifies personal budgeting.

3. Flexible Vehicle Choice: With a novated lease, you can choose the make and model of your car according to your preferences and needs. Whether you prefer a fuel-efficient compact car for city driving or a spacious SUV for family outings, a wide range of options are usually available.

4. Maintenance and Repairs Included: Many novated lease agreements include maintenance and repair costs, providing peace of mind and eliminating unexpected expenses associated with vehicle upkeep.

5. Employee Portability: In many cases, if you change jobs, you can take your novated lease to your new employer, ensuring continuity and convenience in managing your vehicle expenses.
   

How a Novated Lease Works

• Step 1: Choose the petrol car you wish to lease.

• Step 2: Your employer signs a lease agreement with a finance company.

• Step 3: The employer deducts lease payments from your pre-tax salary.

• Step 4: You drive away in your new car, handling it as if it were your own.

Choosing the Right Petrol Car for Your Novated Lease

When selecting a petrol car for your novated lease, it's important to consider the model and make and the vehicle's fuel efficiency, maintenance costs, and resale value. 

Popular choices often include models known for reliability and economy, such as the Porsche or the Mazda 3.

Factors to Consider

1. Fuel Efficiency: Opt for cars with high fuel efficiency to maximise ongoing savings.

2. Maintenance Costs: Some brands offer free servicing periods, which can further reduce costs.

3. Resale Value: Consider cars that hold their value well to maximise the benefits when the lease ends.

Tips for Reducing Total Leasing Costs:

1. Compare Different Models: Before settling on a vehicle, compare several petrol cars to find one that combines affordability with your desired features.

2. Negotiate the Terms: Don't hesitate to negotiate the terms of your lease. This can include the monthly payment, the lease term, and even the end-of-lease options.

3. Track Your Vehicle Usage: Keeping track of how much you use your vehicle can help you stay within mileage limits and avoid excess usage charges.

4. Regular Maintenance: Adhering to a regular maintenance schedule can prevent costly repairs and keep the vehicle in good condition, which is beneficial if you decide to purchase the vehicle at the end of the lease.

How To Set Up Novated Leasing?

1. Choose your petrol vehicle model right here.

2. Simply fill out our Fast Form, and we'll schedule a call to start things off.

3. Complete our credit application, and once approved, sign the lease documentation to move forward.

4. We will email your employer the onboarding information, walk them through the process, and sign the deed of activation.

5. Upon finance settlement, your new petrol vehicle will be on its way to you.

6. We issue payroll advice to your department or supplier (e.g., Xero) to ensure seamless payment arrangements.

Ready to Elevate Your Drive with a Petrol Vehicle Novated Lease? Contact Novated Finance Australia now.

Frequently Asked Question

• What happens at the end of a novated lease?

  At the end of a novated lease, you can either upgrade to a new car, purchase your current car outright, or extend the lease, depending on your contract terms.

• Is every employer offering novated leasing?

  Not all employers offer novated leasing. It's essential to check with your HR department about available employee benefits.

• Can I choose any petrol car with a novated lease?

  Yes, you can choose any new or used petrol car that meets the leasing company's criteria.

• What happens at the end of the novated lease term?

  At the end of a novated lease, you typically can purchase the vehicle, trade it in for a new lease, or extend the lease term.