Novated leases are a great way for individuals to lease – and eventually purchase – a car salary packaged
through their employer.
However, there are plenty of misconceptions and myths around novated leases, leaving many people asking, ‘Are they worth it?’ Whether you’re seeking a novated lease through your employer or are a business owner considering offering novated leases to your employees, there are plenty of benefits to signing a Novation Agreement.
Myth number 1: They are only available to businesses.
Novated leases are one of the most cost-saving car loans available to individuals. Many people falsely believe that novated leases are for business use only. In fact, they are an agreement between the employee and employer and can be used by other members of the employee’s family, as long as they are covered by insurance. Whether you’re looking for a new = or = second-hand car, novated leases are available for a wide variety of vehicles.
Myth number 2: It is expensive.
There is a common misconception that novated lease providers charge a premium for the cost of the car. This is incorrect. Consumers can access more competitive prices if securing a car through a fleet provider, who negotiate better deals thanks to their strong relationships with manufacturers as they purchase large numbers of vehicles each year. In addition, because the monthly repayments and running costs come out of the employee’s pre-tax dollars, the employee saves on these costs throughout the life of the lease.
Myth number 3: There is a lot of administrative work.
For businesses reluctant to offer novated leases to their employees because they think that it will cost them time in paperwork and administration, one of the best parts of a novated lease is that the agreement is managed by a third party. It is a simple and hassle-free process. Once a business sources a novated lease provider, they simply need to notify their employees that novated leasing is part of their salary package offering and ensure the payment is deducted from the employee’s salary.
Myth number 4: Only high-income earners will benefit.
There is a common misconception that only those who earn large salaries can benefit from a novated lease, but the truth is far from that.
Employees earning from around $60,000 to six-figure salaries who are interested in taking out a car loan can use a novated lease to help stretch out repayments and choose another vehicle at the end of the lease term or pay off the residual amount to purchase the vehicle outright.
Metro offers salary packagers and their clients a range of long-term novated leases, ranging from 12 to 60 months. Furthermore, employees can also salary package their registration, insurance, on-road costs, vehicle maintenance, and fuel card. Regardless of how little or how many kilometres they drive, there are plenty of benefits.