Novated lease is a type of vehicle leasing agreement in many parts of Australia that allows business to lease out a vehicle through executing a lease deed. The business performs the leasing on behalf of its employee who cannot afford a car through a down payment. Many companies are using the novated lease benefits as an aspect to boost employee’s morale and thus increasing their profit margin. Under this lease, the responsibility to pay the EMIs of the leasing deed rests upon the employee, and the amount will be deducted from the employee’s pre-tax income.
Under individual agreements, the employer takes the responsibility of making the payments of the lease agreement on behalf of the employee, and then the employer deducts the amount from the employee’s pretax income. The novated lease agreement is a mutually beneficiary scheme to both the employee and the employer since this will improve the employee morale and also benefit the employee as this reduces the tax liability hence taking more money home.
Moreover, a monthly payment is better than down payment since this will reduce the cost burden of both the employer and employee. And the savings on tax liability is a good reason why both employee and employer will go for this deal. Furthermore, the flexibility attached to this leasing scheme, i.e., the employee can add few more features to the car and can opt for a new or used car depending on his repayment ability and monthly surplus. All these features are making the novated leasing scheme the most ideal, and more people are attracted to such deals.
Another advantage that makes employee love such transactions is the fact that even when an employee switches jobs from different companies, the deal still exists and one will continue enjoying the benefits. If an employee moves to another company during the leasing period, it is easy to transfer the lease from the old employer to the new employer. The novated lease benefits also called the salary packaging are reviewed as part of employees earnings agreed to pay for the benefit of a car. Under such an agreement, the employee can include any other benefits such comprehensive insurance, vehicle finance, registration, maintenance, fuel, tires, battery replacement, road assistance etc. as elements of leasing without fail by employees.
Now, if you’re looking forward to benefiting from such deals, consider visiting VehiclesSolutions.com.au – Novated Lease for more information. Here, you will learn more about novated lease agreements, and you can even get the car of your dream. The experts her will take you through the lease agreement and ensure that you understand everything. Once you agree, then you can start the journey towards owning your dream vehicle.