1300 Car Finance

Novated Lease Finance

The Novated Lease Finance agreement is a tri-party agreement between the customer, the employer and the financier. The repayments are deducted from the customer's gross taxable income, therefore reducing the amount of tax that you are required to pay.

What is Novated Lease Finance?

Novated Lease Finance is where the repayments of your finance are taken out of your pretax salary by your employer, who in turn makes the repayments to the financier on your behalf.

The Novated Lease Finance agreement remains in place while you are employed at that company, however, should you decide to change employers then the loan repayments simply become your responsibility.

Who is Eligible for Novated Lease Finance?

If the company that you work for offers you the option to package your salary, then you can enjoy the benefits associated with Novated Lease Finance.

Some customers are unaware that their companies offer salary packaging, so it might help to check with your boss or pay office. You could be missing out on huge tax savings!

Novated Lease Finance Benefits

• The repayments are taken from your gross salary, reducing your taxable income.
• Flexible loan terms to suit your budget (1-5 years).
• Residuals/Balloons can be structured to reduce your repayments.
• Fixed interest rate.
• Fixed monthly repayments.
• You can obtain pre-approval before you go shopping, giving you greater bargaining power.

Novated Lease Finance Tax

Under a Novated Lease Finance agreement GST is charged on the monthly repayment. This may be claimed as an input tax credit by your employer, provided they are registered for GST. GST is also payable on any residual value at the end of the contract.

Fringe Benefits Tax (FBT) is payable on Novated Lease Finance agreements and is calculated on how many kilometers the employee travels each year. The higher the kilometers, the lower the FBT.

e lease repayment on the amount financed up to the Luxury Car tax Limit ($57,180) is deductible from the pre-tax salary of the individual. Generally, if a vehicle price exceeds the Luxury Car Tax limit, it can not be financed through a Novated Lease Finance agreement.

Need a car finance quote?

For more information or if you have any questions about Novated Lease Finance, just call 1300 Car Finance thats 1300 227 346 and speak to a qualified finance consultant or why not complete our friendly online finance enquiry form and a experienced finance consultant will contact you shortly.