Novated lease is a concept that comes into the picture when someone intends to buy a car. It is not a conventional process of purchasing a car, but it has some definite benefits. Due to those benefits, it is worth considering this exclusive method of finalising a car purchasing deal. Novated lease involves the buyer, seller and employer of the buyer. Usually, we find that two parties are involved in purchasing or selling a vehicle. Those parties are known as buyers and sellers. Now, buyers can involve another party who shall pay the lease premiums on the monthly basis, and this person has to be the employer of the buyer. To understand it, it is essential to know the reasons for choosing it. So, here are those reasons for the future car buyers.
- No Hassles of Bank Loan Application
The best thing is that the novated lease is hassle-free. It may sound a little complex, as it is practised limitedly and lesser known among the car buyers. However, it is quite a simple thing to understand. If you have a stable job under a reputed employer, novated lease for purchasing a car is a perfect option for you. It would not drag you into time-bound and tiresome loan application process in banks. You can escape the hassles of bank loan application by choosing other private lenders. But, the pain is that you have to pay a higher rate of interest for repayment of a loan in that case. Nevertheless, credit rating also plays a crucial role in getting a bank loan. With novated lease for purchasing the car, there is no hassle of credit score analysis.
- Reduce Your Taxable Income
When you choose a loan for buying a car or personal vehicle, you have to pay it from your bank account or salary account. Since you pay the premium of the investment after getting the salary, you are paying taxes on the loan premium amount as well. With the novated lease, employers pay the premium before they disburse salary to your account. As a result, the tax on your income gets reduced, and it could end up being a significant amount after 3 to 4 years later. To calculate the premium rate, you can check the novated lease calculator.
- Convenience of Repayment
Novated lease comes with a lot of conveniences for the car buyer. Firstly, the employer pays the premium for car leasing from your salary. You do not have to manage it separately. It also reduces your taxable income, and that helps you to make a small but significant saving. Another important thing is that the novated lease is flexible. The agreement can be for three to four years, as per the wish of the car purchaser.
- Transfer Lease by Buying New Car
You can buy a new car and transfer the lease. In fact, after the lease contract term is over, you can also choose to extend the lease period. Otherwise, you may decide to sell your car and purchase a new one to start afresh novated lease contract. All sorts of options are there with car buyers.
Are you not satisfied yet? Do you want more reasons why the novated lease is the best deal? Well, for more details you can stay tuned with us!