There are two main types of novation arrangements, according to Advance Car Loans Pty Ltd:
* A fully maintained novated lease, which includes all running costs
* A standard novated lease, which is finance only.
Benefits of a novated lease for the employee include:
* Greater flexibility with the choice of a vehicle. Advance Car Loans has access to a broad car dealer network.
* Financing of the vehicle may be paid with pre-tax dollars
* Option to own the vehicle at the end of the novated lease term
* The vehicle may be leased for 100 per cent private use
* More than one vehicle may be leased with employer consent
* Running costs such as registration, insurance, fuel and servicing can be included
Benefits of a novated lease for the employer include:
* An easy and cost-effective way to add value to an employee’s remuneration package. Advance Car Loans assist with this process every step of the way.
* Time and costs associated with management and disposal of the vehicle are not the employer’s responsibility
* On termination of the employee’s employment or novated lease, the responsibility of the vehicle is passed on to the employee
Easy steps to a successful novated lease
* Establish whether current employer offers salary packaging and novated leases or is agreeable to investigating the benefits. The Advance Car Loans corporate consultant can contact the employer to explain the process in detail.
* Contact Advance Car Loans and obtain a novated lease or fully maintained novated lease quote from a consultant
* Proceed with pre-approval for the finance of the vehicle
* Decide on vehicle. Advance Car Loans can assist with obtaining discounts on all car purchases. With its dealer network, Advance Car Loans will get a favourable deal and negotiate a fleet discount. This a service provided free of charge.
* Advance Car Loans handles the invoice directly with the dealer.
* Deed of novation and paperwork prepared by Advance Car Loans is signed by all relevant parties.
* Payroll or human resource department of employer sets up deductions from employee’s salary package. As Advance Car Loans is an expert at novated leasing, it can assist with this process.
* The employee can drive the new vehicle and get the tax benefits at the same time.