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A novated lease is a three-way agreement that is closed between you (the employee), your employer, and a financial company. This is a tax efficient way of purchasing a car and saving money in no time. If your employer offers novated lease, you can choose a car that you want to buy and your employer will pay the finance company from your monthly salary. You’ll end-up paying less in taxes because the payments are deducted from your pre and post-tax salary.

Steps of buying a car with a Novated lease

The first step is to shop around and select a car of your choice and ask the finance company to provide you with a quote. Confirm you’re comfortable with all the costs including the running costs of the car before you finalize the agreement. The finance company you choose will then purchase the car for you if the novated lease agreement is in order and you get to save GST on the value of the car. They will have the vehicle delivered to you and start enjoying the car as you save. Finally, your employer starts making payments for the novated lease by taking some amount of money from your pre and post-tax salary.

You save on tax

The tax office classifies a novated lease as ‘Fringe Benefit’ because your employer will be using money from your salary to make payments for the car that you’ll be using for running a business or personal errands. The benefit attracts what is called a Fringe Benefits Tax (FBT). The only tax you’ll be required to pay is the tax office formula, which is calculated based on the value of the car. The finance company you choose will work it out for you. You can reduce the FBT payments to an amount that is equivalent to the amount you pay for every post-tax salary dollar. In other words, you can eliminate your FBT liability by utilizing contributions from your post-tax salary for covering the FBT amount. Novated Lease https://www.strattonfinance.com.au/novated-lease/novated-lease-salary-packaging.aspx

After the novated lease

You can choose to do the following at the end of the novated lease:

• Save on GST on the car value and running costs by arranging another agreement to buy another car.
• Refinance your current car by arranging a further lease to continue enjoying savings ongoing.
• Buy your car at its value when the lease ends. You can also choose to sell the car at this point – you can get tax-free profits.

If your employer offers novated lease, choose a nice car and enter into an agreement with your employer and the finance company. It’s always good to transfer the lease to your employer while you’re working in that company.

If you are looking to buy a car, you might be trying to decide whether or not you want to use the services of a car finance company. Even though this is not your only option for purchasing a vehicle, there are a couple of reasons to consider it. These are some of the advantages of taking out a loan to buy a car rather than buying it in cash.

Keep More Cash in Your Bank Account

If you have enough money on hand to pay for a car outright, you might be thinking about trying this option rather than using a car finance company to help you pay for your vehicle. Even though this can be good in some ways, such as the fact that you will not have to worry about paying interest on your car. However, it can also be a bad thing in some ways, and some people find that they are better off using a car finance company rather than spending all of their money on a vehicle. For example, you might find yourself in an emergency situation later on in which you could have used the money that you spent to buy the car. By using just some of the money for a down payment and keeping the rest in the bank, you can help ensure that you have money on hand in case of an emergency.

Buy a Nicer Car

Another good thing about using a car finance company to pay for your vehicle is the fact that it can help you buy a nicer car. Many people do not just have enough money sitting around to buy a nice car. Instead, they might use the cash that they have to buy an older used car. Even though this might seem like a smart move at the time, it can cause problems. For example, you might find that the car has mechanical issues that are costly to fix, or you might just find that the car is unreliable in general. Plus, you might wish that you had a newer and nicer car with better safety and tech features.

If you are willing and able to use a Car Loans at Stratton Finance company to pay for your car, however, you can increase your spending power. Depending on things like how much you can afford to spend on a monthly payment and what your income level and credit score are, you might be able to borrow a larger amount so that you can buy a new or gently used car. Then, you can actually buy the nice car that you want, even if you don’t have the cash on hand to pay for it.

As you can see, even though it’s true that there is some value to buying a car in cash if you’re able to, it is not always the best option. Many people find that they are better off using the services of a car finance company to take out a loan to buy a car. If you shop around for different car finance companies, you should be able to find one that can help you buy the car that you want.

When you first purchased your car, you might have signed the paperwork for your car loan and been perfectly content with the deal that you had made. Now that time has gone on, however, you might be unhappy with your car loan for one reason or another. Even though you might think that you are stuck, you may have options. For example, you may be able to refinance your car loan so that you can keep the same car but make payments to a different lender. These are a few signs that it might be a good idea for you to look into refinancing the loan on your car.

Your Credit Has Improved

If your credit was bad when you first applied for your car loan and purchased your car, you might have just been happy about the fact that you got approved in the first place. However, if you have been working on your credit and think that your score might have improved, such as if you have been making on-time payments on your current car loan, you might qualify for a better loan. One good way to find out about this is by looking into refinancing.

You’re Paying Too Much in Interest

Of course, most car lenders charge interest on their loans. After all, they have to make money somehow. However, some lenders charge much higher interest rates than others. If you are paying a high interest rate, you should know that you are probably going to end up paying a lot more for your car than you have to. One big reason why many people refinance their loans is because they are able to find better interest rates, which can help them save money both each month on their monthly payments and in the long term in regards to how much they actually spend on purchasing the car.

Your Payments are Too High

If you are like many people, your situation might have changed since you first bought your car. Even though you might have been able to afford your Stratton Car Loans payments at the time, you might have found that the payments are putting a huge damper on your budget now. For example, you might have had a child or lost a job in the meantime. If this is the case, refinancing your car can be a good option. If you refinance your car loan on a longer term, then you can keep the same car but pay less in payments each month. This can provide you with a little more wiggle room in your budget and can make your car a lot more affordable.

Some people pay their vehicle loans all the way to term without ever even thinking about refinancing them. However, for some car owners, this can be a good option. These are a few signs that it might be a good idea to look into a few lenders to find out more about refinancing your vehicle loan.