A novated leasing is car loan set up as a finance lease arrangement between you, your employer and a finance company, where the obligation for the payment of lease rentals is transferred (novated) from you to your employer for the term of the agreement, so your employer pays your lease rentals directly out of your salary.
It enables you to finance a vehicle of your choice, while enjoying the tax-effective benefit of making the car loan repayments from your pre-tax salary.
The benefits of novating leasing include:
Payments are made in pre tax dollars – payments are made with income before it is taxed yet so overall your take home pay is increased
Unrestricted Use – Its your car so there is no restrictions on how you use it.
Flexible Terms – Lease terms and residual can be tailored to suit you! Want to change cars more frequently? This may be an option for you.
Retain Ownership of car – The car is registered in your name from day 1 so there is no unnecessary costs at end of agreement to have car registered in own name
You Keep any profits – If you sell your car at the end of the lease for more than what the residual is, it yours to keep TAX Free.