Novated Lease/Salary Packaging

[fatal3rror]

My future employer in Australia offers a novated lease scheme via https://www.smartsalary.com.au/

This basically allows me to lease a fully maintained lease car through the company and pay for it from my gross pre-tax salary and paying ~20% fringe benefit tax. We have a similar scheme here in the UK and for a new car, it is pretty lucrative given the tax benefits. Of course, in the UK, the BIK (similar to fringe benefits tax) is based on emissions so EVs and PHEVs are particularly great deals.

Any thoughts on how some of these schemes compare to a finance directly from a dealer/manufacturer? Generally, are car leases a big thing in Australia compared to UK, via the company or not? In the last few years, I have bought used cars but previously when buying new, it was a no-brainer to go for the lease.

[fatal3rror]

romeodelta said:

I don't have much experience here, my ex-employer offered it but it's not really my thing.

Personal leasing doesn't seem too common in Oz - most cars are advertised with drive away prices rather than the ubiquitous £xxx per month in the UK.

On paper, seems like a good deal when buying a new car. What's the usual finance rate on a new car? I think they charge ~10% which is where they might be making their money from.

[fatal3rror]

forzaminardi said:

My employer offers it through NLC. It does seem like an attractive deal, they also package up insurance, registration and fuel. I'm tempted when it comes to our next sensible car.

Yeah, that's what makes it attractive. From what I have seen so far, the finance and insurance rates through them aren't that good and that's where you need to compare apples to apples. The calculations on their own websites need to be taken with a pinch of salt, as one would imagine. Also need to take into consideration the fringe benefits tax.