These days, car finance options can feel endless, not to mention confusing. You may have heard of a novated lease, but you might not be familiar with the benefits that come with this option.
Not to stress!
Before you make a decision, we’ve put together a handy guide with everything you need to know about novated leasing- and we’ll bust a few common myths along the way.
What is a Novated Lease?
A novated lease is an ATO-approved way to salary package your car. It’s usually an arrangement between you, your employer, and a finance provider like Oly.
This arrangement often means less admin and fewer bills to juggle, because your car payments and most running costs are bundled into one regular payment. Your employer then makes that payment using a mix of your pre- and post-tax salary, which could reduce your taxable income and potentially save you money on tax.
A provider like Oly can help setup the arrangement between you and your employer from sign-up through to arranging automatic salary deductions.
Before you consider a novated lease, let’s bust some common myths…
Myth 1: It’s only for people working in big business or government
Not true! Many small and medium-sized businesses can also participate in novated leasing.
Full-time and part-time employees (and even some self-employed workers) may be eligible. If you have a steady income and an employer willing to agree, a novated lease could be a handy option worth considering.
Myth 2: You need to earn a lot of money
You may still benefit from a novated lease regardless of your income level.
While savings depend on your individual income, choice of car, and usage, payments are generally taken directly from your salary, with a portion coming from your pre-tax income.
If you choose an eligible electric vehicle, you may receive additional benefits, as the full payment can often come from pre-tax salary, potentially increasing your savings even further.
Myth 3: You’ll never own your car outright
When the lease ends, you’ll usually have several options:
- Pay the residual amount and own the car outright
- Pay the residual and start a new lease on a different car
- Refinance the residual and continue using the same car
Why choose a Novated Lease?
While the benefits depend on factors such as your employment type, employer, and financial provider, a novated lease may help you unlock savings by salary sacrificing (also known as salary packaging) your car payments, including most running costs.
Why choose Oly?
With so many options available to car buyers, Oly aims to simplify the novated leasing process — making it easier to understand, set up, and manage.
You can find more information by heading to the Oly website at oly.com.au
IMPORTANT NOTE: This is general information only and not financial, tax, or legal advice. Eligibility criteria, employer participation, and terms and conditions apply. Potential tax outcomes and savings will vary based on eligibility, individual circumstances, and current legislation. Your actual savings are dependent on your personal circumstances. Seek independent legal, financial, or other professional advice before making any decisions related to this information.
