scrappyhappy8

I know it does not make economic sense to a lot of people but I would just like to get some information on leasing vehicles as I have a large family, and with the price of vehicles I might have to go down this route to start with as finances are going to be very tight although I do have a job to go to.

Does anybody have experience with this and what is involved?
Thanks

DEEDEE01

Would be interested to know the answer to this one myself.

Donna.

Kooky.

Hi, have a quick search for "novated lease" and you should find some recent discussions.

If you can do this, you pay out of pre-tax salary which saves you quite a few bucks in income tax, as well as other savings.

sr71

Can someone can enlighten me how this works?

Example, I looked at a car worth $65,000 - dealer said no deposit personal loan with a balloon payment would cost me $1,100 per month. A novated lease would cost me $2000 a month but this would be taken pre-tax. I really can't see the point of leasing for a private individual.

And apparently to save money on leasing you have to do a large amount of kilometres.

Siren & Brian

When you lease the payment is everything included. Car, insurance, rego, petrol, servicing, tyres etc

spartacus

Petrol included?

Kooky.

Certainly in our case, yes, as we have a fuel card. Therefore all of the above paid for out of pre-tax salary AND excluding GST IIRC.

(Obviously they have to make some adjustments now and then based on actual costs.)

spartacus

Thanks SS. Very good.

Kooky.

HOWEVER you do have to do a certain mileage pa or the tax man gets vicious. Not sure of the exact details but if somebody more knowledgeable doesn't chip in I will endeavour to look up the paperwork.

I do know The Geek drove to Canberra on business last week, at his own expense, to put a few miles on the clock.

NickyC

I used to lease a car as an individual and it was definitely worthwhile in my situation.

I worked from home then and the bulk of my car trips were quite legitimately work-related. I was able to claim a personal tax deduction for the work-related proportion of car-use - and this included all car costs (lease payments, petrol, insurance, repairs, servicing - the lot). This was all done via a finance lease.

I could have had a novated lease though my (own) company but I didn't want to have to satisfy the minimum mileage requirements, didn't want the FBT implications etc. It was much more straightforward for me to lease the car as an individual.

jayr

The highest tax rate is if you drvie less than 15,000km per annum and is 26%. That is Fringe Benefits Tax (FBT) and is in place of the fact that you pay no income tax. Many will be on a 30% marginal income tax rate so replacing that with 26% is a saving. IF you do more than 15,000Km the rate drops to 20% and lower still for higher mileage.

Other costs like petrol, maintenance, rego and insurance are subject to neither income tax nor to FBT and are therefore tax free.

jayr

To be clear, novated leases do not have minimum mileage requirements and any FBT you pay is likely to be less than the income tax you would otherwise have paid.

Kooky.

Thanks, jayr.

thlo

I recently assisted a doctor with finance on his new vehicle and he had to think hard about whether to go for a consumer loan or a novated lease.

His employer being NSW Health only allowed him a fully serviced lease which meant he had to spend a minimum fixed amount every month regardless of how much he would use the car. Simple maths showed him that a consumer loan would save him thousands compared to the maintained lease (even with tax savings).

bobbyfaescotland

Here is the company I use, I do 25,000kms a year and am saving a huge amount of money compared to financing myself. My company also gets a fleet discount which is good.

http://www.sgfleet.com.au/


Here is a calculator on there site you can use.

http://www.sgfleet.com.au/Calculator...Calculator.asp