Beaver

fng - I've done the numbers and I also have the benefit of knowing which leasing company you are going with. I can say with 99.99% certainty that you will not be saving any money .

They also make you lease an extra $500 a month for running expenses. Sounds like you do about 5,000 kms a year.

Also note that you need to sell the leasing coy your car and they will hit you for stamp duty on that sale.

My advice - redo the spreadsheets.

Black_SIIK

I just got my car on novated lease...

i got an 99 model,

the NLC novated lease pay me $30,000, in cash, and the lease go for 3 years,

and i guess i have to put heaps of kms on over 40,000km/years so that i pay 7% FBT,

great way on saving money on tax.!!

Austblue

You know what's better? Owning a FBT exempt ute!

I know I'm harping on it but when you consider that you're paying 2100/year in FBT plus you're paying 12% for the finance which is 5% higher than private credit so add another 1500. And if you don't have to drive 40k/yr but think you'll save if you do you're having yourself on. The added cost of maintenance will snatch the shirt off your back.

IMO the only way a lease benefits you is if you're paying loooooads of tax and you own a high priced car that is expensive to maintain or if you have a more productive use for the principal amount but then it still has to be enough to offset the added expense.

replicah

i just managed to get my lease onto 7% interest which i am pretty happy about!

no more balloon payment.. and as it's a business lease im looking forward to the tax write offs

sleepyf1

bollucks, you don't need to have an income in the highest tax bracket to benefit from a novated lease.

I currently have a novated lease with my S2000 too and I structured it in a way that i benefit at the end of the year.

You need to do a bit more research because every person's circumstances differ.

Talking to an accountant is the first step. I'm an auditor by profession and have a good understanding of tax accounting so I was able to structure a lease agreement for myself.

Keep in mind these factors.
1. Income Tax Savings per year.
2. FBT liability per year (statutory vs operating cost methods)
3. GST savings claimed by your company.
4. Estimated running cost you pay per year.
5. If you are not in the highest tax brackets, you are probably better off packaging only the motor vehicle portion and paying the running cost yourself out of after tax income. Every dollar paid out of after tax dollars to a motor vehicle under novated leases can be offsetted against your FBT liaiblity.

Hope this helps

sleepyf1

Also, there are some leasing companies that will allow you to have a car older than 8 years at the end of the lease. Down side is that you'll pay a slightly higher rate of interest. Expect something like 8-9%

I'm with Macqaurie Leasing, have a 6 year old car, with a lease agreement of 3 years.

I had a finance broker "shop" around and he told me a car could be no older than 7 years at the end of the term.

I got rid of the idiot.

Austblue

sleepy, who are your comments directed at?

FWIW I did speak with an accountant and I also did a fair amount of research based on my specs and I must say I'm very happy with how my vehicle is set up. I can tell you now though that I do not have to do more research to find out that people's circumstances differ as it has no bearing on my case.

BTW you've referenced the contribution method in point 5, is this to say that you believe its cool to pay $14k out of your net salary tax i.e almost $20k gross (using blacks2k's posted figures and my assumption posted on them above) as your contribution? That's still ~$5k in tax you're paying before making the contribution which is a fair whack if you ask me.

I suppose it all comes down to what you define as a benefit. If you're going to buy an S2000 no matter what then yeah your circumstances might mean that a novated lease could save you some but if you look at the alternatives it certainly isn't the most beneficial option, IMO.

FWIW I looked at getting a novated lease but when the supplier stuffed me around I looked at other options of achieving the same thing and I'm now much better off then I would have been.

fng

Well I was considering going with Macquarie as a salary sacrifice to package the car but it doesnt seem to add up .. FBT I did not account for.

It also states you need to pay out 50% of the lease value once it is up. So probably going to forget about leasing.