No one likes paying more tax than they have to, that is one of the reasons thousands of Australians have turned to novated leasing when it comes to getting into a brand new or used car.

Novated leases can be a tax effective way to get the new car you need, but how exactly do they work? Essentially, a car is leased in your name, via your employer, and instead of paying with the money you have left-over after tax, your lease is covered using funds from a combination of your pre and post-tax salary.

But you might not know that when you take out one of these leases, you can also bundle all of your running costs into one manageable fortnightly sum. What’s more, you can also pay for some of it before you get taxed.

When adding up all the benefits of a novated lease, it’s important to factor in everything you can package – in addition to your car repayments:

• Registration
• Insurance
• Fuel
• Maintenance
• Tyres
• Miscellaneous (including batteries)

What bundling these costs means for you

You get one neat figure to pay every fortnight that helps you keep your day-to-day budget, instead of having to fork out for one-off big costs like registration. And, if you don’t spend your allocated budget by the end of the lease, you can simply request to have the money returned to you.

How we calculate a novated lease budget

We can help you set a budget for your car’s running costs based on the type of vehicle you’d like and distance you typically travel. Then, we deduct the costs from your pre and post-tax salary automatically through your payroll.

All you need to do is tell us what car you’d like, how far you think you’ll drive, and your annual salary, and we’ll help you choose the right fit for your lifestyle. Ready to take the next step, head on over to our Novated Lease page to learn more, or get in touch directly today.