At present, lots of people feel as though having a car is a fundamental necessity. It is quite correct that commuting or taking public transit could be a hassle, particularly if you will need to go around a lot during your work day - meeting clients, making deliveries, and buying supplies. Even if you have a desk job, a private vehicle will often prove useful if you have to take the kids to school or drop your spouse off at his or her job too.
For many normal employees, a novated lease can be quite a easy way to get hold of the car that they need. A novated lease is simple a three-way agreement that requires an employer, an employee, and a leasing company. A vehicle is leased to the worker, while the employer makes sure that payments are made on the car from the employee's pre-tax earnings. If you are looking at availing of this sort of car lease nevertheless, you should know of the good stuff and bad things about it.
This arrangement is pretty convenient, but there are several minor novated lease drawbacks. To begin with, you will only be leasing the car - you don't really own it as yet. This implies that while you can easily benefit from the ease of driving it, you are not permitted to make any alterations or modifications to it. At the end of the period set for the lease, you still have to either pay the residual or return the unit.
Obviously, the residual value is also one of the things to look out for when you avail of this sort of lease. Should the car depreciate once the leasing period ends, you will still have to pay the entire amount of the residual value agreed upon in advance. Finally, the car lease involves you in a long-term legal responsibility. You can't get out of the agreement swiftly without paying a number of fees associated with cancelling the lease.
Regardless of these novated lease negatives however, it might still be worthwhile to avail of this kind of car lease. One of the most basic benefits of novated leases is it won't critically hinder your usual cash flow. You won't have to pay out lots of money to get your car, so that you will remain fairly solvent. These leases are also fairly flexible - they enable you to decide on the type of car you want, and you can also discuss the terms of the lease to ensure they are easier for you to maintain.
And of course, one of the things that people like best regarding novated leases is the tax benefit. Since the payments are removed from your pre-tax pay, you may find yourself going down a whole tax bracket. Thus, they are specifically advantageous to those in the 30% bracket or higher.
While novated car leases may have their drawbacks, they also have some major advantages that make them a very desirable choice for employees who would like to own a car. To learn more regarding novated leasing and where you can find the most effective leasing company, click here.
For many normal employees, a novated lease can be quite a easy way to get hold of the car that they need. A novated lease is simple a three-way agreement that requires an employer, an employee, and a leasing company. A vehicle is leased to the worker, while the employer makes sure that payments are made on the car from the employee's pre-tax earnings. If you are looking at availing of this sort of car lease nevertheless, you should know of the good stuff and bad things about it.
This arrangement is pretty convenient, but there are several minor novated lease drawbacks. To begin with, you will only be leasing the car - you don't really own it as yet. This implies that while you can easily benefit from the ease of driving it, you are not permitted to make any alterations or modifications to it. At the end of the period set for the lease, you still have to either pay the residual or return the unit.
Obviously, the residual value is also one of the things to look out for when you avail of this sort of lease. Should the car depreciate once the leasing period ends, you will still have to pay the entire amount of the residual value agreed upon in advance. Finally, the car lease involves you in a long-term legal responsibility. You can't get out of the agreement swiftly without paying a number of fees associated with cancelling the lease.
Regardless of these novated lease negatives however, it might still be worthwhile to avail of this kind of car lease. One of the most basic benefits of novated leases is it won't critically hinder your usual cash flow. You won't have to pay out lots of money to get your car, so that you will remain fairly solvent. These leases are also fairly flexible - they enable you to decide on the type of car you want, and you can also discuss the terms of the lease to ensure they are easier for you to maintain.
And of course, one of the things that people like best regarding novated leases is the tax benefit. Since the payments are removed from your pre-tax pay, you may find yourself going down a whole tax bracket. Thus, they are specifically advantageous to those in the 30% bracket or higher.
While novated car leases may have their drawbacks, they also have some major advantages that make them a very desirable choice for employees who would like to own a car. To learn more regarding novated leasing and where you can find the most effective leasing company, click here.
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