Novated Lease.

[richdave]

Thought I'd start this thread given the direction the insurance thread was going in the Turbo section

Nova Lease based in Sydney (operate nationally) and lease plan both offer managed novated leases.

The key to Novated leases is that FBT is calculated as follows:

Less than 15 000km pa = 26.00%

15 000 to 24 999km pa = 20.00%

25 000 to 40 000km pa = 11.00%

Over 40 000km pa = 7.00%

where the % is the capital cost of the car. If you want more info try this link.

http://www.novalease.com.au/novalease.asp

So the more km's you do the less FBT is payable even if most are personal kms. If you are doing low total kms or high business kms other methods may be more appropriate. Financial advice is prudent before you rush in to signing up but there are certainly benefits for employers and employees alike. :D

[Guest DZ.]

Just on this, a good company that manages your Novated Leases (and I assume Prosperion do this but not having a car through them I'm not sure) can actually eliminate your FBT component. This is done in one of two ways (or a combination of the two).

The first thing you need to do now is work out how much the FBT component is actually worth. Most of us are/will be optioning our XR6Ts up a bit so let's go with a value of $46K after we've done our haggling, and assume we drive the car 16,000 kilometers a year. Your Fringe Benefits Tax would be $46K * 20% - $9,200 PER ANNUM (that's not the actual formula but it's close enough for the purposes of this thread)

The first is the declaration of business kilometers as a percentage of total vehicle use. For example, if you use the vehicle 25% of the time for business travel (you'll need to keep a log book for 3 months to prove this). You Fringe Benefits Tax would be reduce by 25% - $9,200 * 75% - $6,900.

To eliminate the remainding $6,900 you would "pay" the employer some of the running costs - this can be in the form of fuel, insurance, maintenance, and lease payments. Pay $6,900, and you no longer have Fringe Benefits Tax - this works best if you're in a tax bracket that is under 48.5%

If I get bored I'll put a table up comparing Novated Leasing Vs Novated Leasing some time (but I'm going to have to be pretty bored!)

As Dave said, if you're not sure financial advice (also tax deductable) is a must!

[richdave]

Novalease have a calculator to work up some basic informaation. Heres the link.

http://www.novalease.com.au/novalease_calculator.asp

Then just click on the calculator button.

Find attached a screen shot of an example from the calculator.

FYI I have no affiliation or association Novalease, they just have dab handy website for research purposes.

This example is based on $46.5K ORC and 36mth lease, 80% work use

[Guest DZ.]

Oh, and I have no association with Prosperion either :D

Although maybe I should

Go here for another example from a group called Smart Salary

[CJF077]

I think its a good idea. Its a shame I didnt think of it then.

[richdave]

It's never too late, most lease companies will purchase cars up to 5 years old at market valuation and lease them back to the owner :D

You get most of your cash back and then have the tax effectiveness of a lease. At the risk of sounding like I'm pushing Novalease, they do this sort of thing and I'm sure other companies do to.

[Guest DZ.]

You should approach some of the companies we've mentioend (after you've confirmed with your HR department that they'll entertain the packaging) - you'll find they'll be more than happy to come to some arrangement, even if you've already financed the purchase of the car.

[richdave]

Theres talk of a price rise I see.

Any lease agreement is subject to price increases and interest rate movements so your actual interest rate and cost of car are not locked in until you recieve the car.

[Mondie]

Are there any new members here who have leased their XR6T?

What companies have you dealt with and who do you find to be good to deal with?

Cheers Simon

[physh]

I leased mine new, I do more than 25,000km a year.

Best decision, because driving a new XR6T costs me the same in lease, running costs and insurance as my partner's 2 door 2000 Lancer.... *grin*

God I love comparing the amounts and seeing her face when she realises that her 20k car costs pretty well the same as my 47k car... lol.

Basically in a Novated lease you don't pay tax on the running costs, you ONLY pay the remnant FBT on the cost of the car, variable by # km you do a year.

Highly recommended.