Novated lease order to take 6 months

[Paulc1964au]

Ok having just novated an R you really need to be in the higher tax brackets for it to be worthwhile although I got 9K discount and didnt pay GSt of $6K so quite a saving.

I was looking at not getting my car until next September however there was one on route to aus without the rear camera so i dropped the camera. My car is now with the dealer but i am not picking it up Till end of April as i am going on holidays overseas. Look at what cars are listed rather than order one as yes you will be waiting 6 months minimum

[WhiteJames]

Leasing is all good if you require the money to grow your company. Personally ... I dislike paying for something every week/fortnight/month and would rather buy outright and be done with it. Another advantagein buying outright, in a Darwinian way, is that not having to pay for leases and house mortgage for a much bigger house than need be allows for flexibility to capitalise on other investments when the price is right .... after all, we live in a capitalist economy, why not capitalise buy keeping your powder dry.
Cheers
WJ

[SilvrFoxX]

Now WJ.. for the first time I agree 100% with you

[Serge]

Golf GTI with parallel park assist, bi-xenons and detroit 18s. Quoted base value for FBT as $43,834

there are 2 in the country. both are white and both have Rear view camera.
would you be interested?

[Ideo]

Ok having just novated an R you really need to be in the higher tax brackets for it to be worthwhile although I got 9K discount and didnt pay GSt of $6K so quite a saving.

I was looking at not getting my car until next September however there was one on route to aus without the rear camera so i dropped the camera. My car is now with the dealer but i am not picking it up Till end of April as i am going on holidays overseas. Look at what cars are listed rather than order one as yes you will be waiting 6 months minimum

Or do lots of business kms.

I have worked out that the out of pocket expenses for fuel and putting some money aside for servicing and tyres each fortnight is more than the out of pocket cost of my lease.

[brad]

Thanks. Can I ask you one more question, what if you are self-employed? Does it work in your favour?

Novated leases are generally aimed at employees with few other options for reducing their tax. Self-employed people generally have more lucrative options for structuring their car "purchases".

I'm an employee & purchased my Skoda on an initial 2 year novated lease followed by a 1 year novated lease extension. Then the government changed the FBT rules & a 4th year extension didn't have much advantage (~$200pa) to it so I bought the car off financier (a seperate party to the lease company).

Whether it's a good thing for you depends on your individual circumstances. Personally, I thought the biggest beneficiary was the finance company as the (unpublished) interest rates were usurious.

A guy I worked with a few years back thought it was great because he reckons it reduced the amount of child support he had to pay (I think they've closed that loophole now).

edit: If you are unaware of a novated lease then it's quite likely that your employer doesn't offer it as part of your benefits.

---------- Post added at 11:39 AM ---------- Previous post was at 11:35 AM ----------

Or do lots of business kms.

There are no requirements to do business kilometres on a Novated Lease. You can use the vehicle for 100% private use with no disadvantage.

[Ideo]

There are no requirements to do business kilometres on a Novated Lease. You can use the vehicle for 100% private use with no disadvantage.

I had to re-novate due to change in employment. As such I was treated under the new system rather than the old system. For my particular example, because of very high percentage of business use, it made a lot more financial sense to do the logbook method. But you are correct, it is not a requirement.

[hooba]

Personally, I thought the biggest beneficiary was the finance company as the (unpublished) interest rates were usurious.

This is very true, I've spent most of my career in finance and have a swag of stories. My rule of thumb if something is marketed as a tax deduction, then you automatically go on high alert. Basically these companies know that people's common sense goes out the window when they believe that the tax department will pay for it. Anybody who has ever done the number on one of "rent a computer for the cost of a cup of coffee a day and write it off against tax" would be able to work out that the interest rate is typically higher than 25%.

[FJ Steve]

No matter how good the deal is/seems, somewhere, someone, sometime is paying for it.

And my money is on the consumer.

[San Gimignano R]

This is very true, I've spent most of my career in finance and have a swag of stories. My rule of thumb if something is marketed as a tax deduction, then you automatically go on high alert. Basically these companies know that people's common sense goes out the window when they believe that the tax department will pay for it. Anybody who has ever done the number on one of "rent a computer for the cost of a cup of coffee a day and write it off against tax" would be able to work out that the interest rate is typically higher than 25%.

8.5% actually! Checked with Novated Leasing Company.

Agreed though the computer thing your talking about is a joke!