How to save thousands on the purchase of your next car

15 Sep

Spend your days scrolling through car sales sites dreaming of your next set of wheels?

Whether you are looking for an upgrade or simply something a little different, a Motorplan Novated Lease could be the cost effective and simple alternative buying method for you.

But before we get ahead of ourselves, let’s unravel what this actually means for you, your wallet and your ride.

 

Typically, a car purchase involves two parties; the buyer (that’s you) and the dealer. Unlike most other purchases, adding a middle man to the car buying process through a novated lease can bring a whole range of benefits such as an income tax break, fleet discounts usually restricted to businesses and savings on GST.

Essentially, a novated lease is a three-way agreement between an employee, an employer and a financier. The employee pays for the vehicle and running costs using a portion of their pre-tax and post-tax salary; this reduction in taxable income in turn creates a reduction in income tax each and every time you are paid.

The vehicle is also financed exclusive of GST, and the employee doesn’t pay GST on the day-to-day running costs of the vehicle, which are instead claimed as an expense by their employer.

 

“Novated leases are a winner for employers also,” Kelly Kinahan from Motorplan said. “They are a great way to reward and retain the right team without costing employers a cent.

“They are easy to set up and Motorplan can take care of all administrative and reporting tasks. Best of all, there is no residual risk for the employer. If the employee leaves their employment, the lease and the vehicle go with them.”

Kelly said recent changes had simplified the novated lease process and created a new market for customers who drove less than 15,000km per year.

“With no requirement for business use, novated leasing can be a tax-effective way of purchasing a new or used vehicle with any PAYG registered employee,” she said.

Sound too good to be true? Even though a novated lease still posed a risk in some form or another, Kelly said choosing the right provider would help mitigate this.

“Packaged correctly, a novated lease can offer unbelievable savings, but it is important to keep your eye on hidden fees, charges, extended warranties and insurances,” she said.

“Novated lease quotes can be complex to read and often the savings are eliminated by excessive rates and charges.”

Kelly said a Motorplan Naked Lease ensured the real value was delivered to the end user and not sapped through hidden costs.

“Our motto is get what you want and know what you are getting,” she said.

“Naked Lease quotes are easy to read, bare the income tax and GST savings, purchase price of vehicle, breakdown of all budgets including servicing, registration, fuel, insurance, tyres, roadside assistance, the finance portion of your payment and your residual value.”

Find out how a novated lease could be right for you by contacting Motorplan

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