Where are the Smart people( Novated Lease)?

[Brumby91]

Hello to all,

im thinking of getting rid of both my cars ( The Brumby ) ( and My SS) and salary sacrificing a new 4x4 ( Prado)

im very green and new to this , and im sure somebody on this forum has done this or is doing this ( Salary Sacrificing their Vehicle)

Q1) is it a good idea compared to getting a loan for one
Q2) What is covered under a lease ... fuel , services , repairs etc
Q3) if i suffered a catastophic engine failure under lease, is it covered?


i know their are potentially a million other questions, nut having not ventured their before , im unsure.

at the end of the day i do want a new car , im sick of juggling 2 vehicles , plus the missus car, and id like to cut it down to 2 vehicles.


Can some of you guys , give me your perspective, problems, views on what to expect.
My Employer does allow this, through Maaxis ( Unsure of spelling) , but im not sure if its right for me....


Come on , any info , little or small... post it up here , hell it may even help somebody else out!


Cheers for any info and replies that follow ( i will keep monitoring this thread)

[Brumby Kid]

What do you want for the brumby? Any Pics? Hahaha
I know a bit, we were going to for mum through dads work, Never followed through though.
Really i think you need to know all the details of what he will let you do, and then weigh up if its right for you.
Because it is technicaly your employers car, if you look after it he should pay for services, you pay fuel (i think) And yor insurance pays for accidents.
Please correct me if im wrong.

Cheers Cam

[niterida]

I've had a couple of novated leases before, but I was earning $75k and the tax rates were higher. Nowadays with the lower tax rates it is not as beneficial.

NOTHING is covered under the lease - it is incorporated into the lease payments but it still comes out of your salary. So lets say the lease payments are $200 a fortnight, plus fuel ($100), insurance, rego, maintenance etc (another $100) so you have a tital of $400 per fortnight or $10,400 per year (it will be a lot more than that - I am just makng these figures up). If there are unexpected large expenses (say a 4cyl engine blowup in a Starwagon 4WD which is replaced by a V6 Commodore motor and box and costs $10k -hehehe yes I did this) then they pay for it and adjust the amount you owe and adjust the fortnightly payments.

Having had another look at doing it again myself I don't think I would bother - unless you are earning $100k I don't thnk the tax savings of about $2000 per annum are enough to sway the deal. My reasoning behind this is because the lease deals are anywhere from 9-13% and a lot of them have horrible clauses (one of mine had a clause where the interest over 5 years was payable whether I had it for 5 years or 5 days. I bought it for $35k and when I went to trade it in after 18months I owed $37.5k !!). It may be cheaper to get one of those good interest rate deals that new car manufacturers can do at 3 or 4% - 6% saving on $40k could be as much or more than the salary sacrifice savings.

Have a look on the net for a salary sacrifice calculator - that should tell you how much you will save and how much it will cost.

But I would suggest getting real advice from an acoountant or similar. At my work we cannot do salary sacrifice without showing proof that we have consulted a professional.

Personally I wouldn't bother doing it again.

[Brumby91]

I hear what youre saying , and im taking it on board.... And thankyou for taking the time to give me your experiences:D