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Selecting a Novated Lease Vehicle

April 22, 2012 | Comments: 0 | Views: 199

Many Australians are realising the benefits of salary packing a car instead of going with traditional vehicle financing. The opportunity to save thousands of dollars across the term of the loan and effectively give yourself a tax cut is incredibly appealing. This article will look at the various options available to you when selecting a vehicle for your lease, we look at both buying new and pre-owned vehicles.

Once you and your employer have authorised the salary package schedule and after credit approval from the financier and receipt of a signed salary package schedule, the leasing provider will place the order with the successful car dealer.

Where you are acquiring a new vehicle, you have the following options:

1. Most Novated Lease providers will assist you in sourcing your vehicle. They will obtain their best price and advise you of the resulting salary sacrifice amount at the salary package schedule stage. This option is very advantageous as the novated company can do the often stressful negotiating and also leverage their buying power to get you a better deal.

2. You may choose to source the vehicle yourself. Your written request for the Lease provider to purchase the vehicle from your nominated dealer should accompany the Request for salary package schedule. The leasing provider will then prepare your salary package schedule on this basis.

3. You may obtain a written quotation from your dealer of choice and provide this to the Novated Lease provider with your request for a salary package schedule. The lease provider will not disclose the quotation, but will obtain alternative quotations. The best price will prevail and the Novated Lease provider will advise you of the order price during the salary package schedule process.

Owned & Second Hand Vehicles

You can Novate second hand vehicles, a few rules apply around the finance and you should contact your novated provider to discuss this prior to committing. The second-hand vehicle being financed under a Novated Lease arrangement must be in good condition and up to date with the manufacturer recommended servicing.

It must also be registered at lease commencement. Vehicles must not be older than seven years of age at the lease end date. Prior to finalisation of the salary package schedule and before the financier settles the finance on your lease, owned and second-hand vehicles will require a full mechanical inspection at your expense. Please check with your account manager to find an authorised inspection centre.

If you're thinking about a new car loan, be sure to try this salary sacrifice calculator to see how much money you could be saving by going with a novated leasing arrangement instead of the usual auto loan.

Source: EzineArticles
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