Advance Car Loans introduces novated lease options
Advance Car Loans is offering novated lease options, which is becoming a great method for financing an employee’s next car purchase. Novated lease provides many benefits to all parties involved.
Employer benefits:
Apart from offering employees the extra incentive of a car in their remuneration package, a novated lease also
- Takes away the burden of managing a company car fleet
- Takes away the necessity of recording the car as an asset or liability in the business
- Offers an income tax deduction for all payments made under the agreement, including lease rental payments
- Offers many employers, if registered for GST, the ability to claim an input tax credit on the GST paid on the lease (there are exceptions to this)
- Takes the responsibility of making lease payments away from the employer as soon as the employee leaves their job
Employee benefits
- Novated leases offer employees:
- Tax savings through salary sacrifice arrangements as the lease payments are taken out of their pre-tax wages
- Freedom to choose the vehicle they want
- There could be a tax free profit when vehicle is sold
- Unconditional use of the vehicle for both work and private purposes
- Option to own the vehicle outright at the end of the lease term
If an employee leaves their present job before paying off the lease agreement, they have the option to take the vehicle with them to their new employer (if the new employer agrees to take over the novated lease), or they can arrange lease payments themselves.
19-Feb-2007