Red Alert: Don’t buy a car without reading this first!
You may have heard the terms, “salary sacrificing”, “salary packaging” or a “novated lease” used in reference to buying cars.
Well understanding them and how relevant they are to your work situation could save you a lot of money when purchasing a car.
Here’s a quick, user friendly hit list to see if salary sacrificing a car loan would be a good move for you.
One quick definition first:
A novated lease is an arrangement with a financier where you agree to make monthly repayments for an agreed time and to make a one off payment for the balance of the loan. Novation refers to a process where most of the responsibility for the finance rests with your employer, while you’re under their employment. You always remain responsible for the balance payment.
So, why would you want to salary sacrifice a car loan? Well…
You don’t have to pay a cent of the 10% goods and services tax (GST) that every licensed dealer adds to the purchase price of cars.
Also because your repayments and the cost of running your car comes out of your salary before tax it effectively lowers the amount of income you are taxed on and the amount of tax you have to pay.
It gets better…
The tax office defines a car as any motor car, station wagon, panel van or utility designed to carry loads of less than a tonne.
All other goods carrying vehicles designed to carry less than a tonne and all other passenger vehicles designed to carry less than nine people.
Odds are your chosen vehicle will fit this category, making you eligible to salary package your car.
Don’t worry just one of our friendly Rate detective consultants know roughly:
The kind of car best suited to your requirements, i.e., family sedan, Ute, 4wd etc.
How many K’s you roughly think you’ll do a year.
Whether you’d prefer a 1,2,3,4 or 5 year lease option.
Whether you’re full or part time and your current gross salary for the year.
From this information they’ll be able to provide an approximate quotation showing you how much you’ll save.
Your specialised Rate detective car loan consultant leaves no stone unturned in aligning your personal requirements against our panel of leading financial institutions.
We have found by experience that a novated lease can be a superior alternative to purchasing a car via a personal loan or higher purchase agreement.
Yes often you can through a Sale and Lease Back novated lease option provided your car falls within the age and budget requirements for a novated lease
You’ve heard wrong, the car can definitely be used for personal use.
Well you’re right, as with any financial arrangement there is a process to follow, that’s why your Rate Detective consultant will stay with you every step of the way offering you there experience and guidance.
That’s the easiest part call or email Rate Detective today to enquire today whether salary sacrificing your next car loan is the right option for you and how much might you save by doing it.