Jade Car Loans provides Novated Car Leasing with Salary Sacrificing for employers seeking to provide a vehicle for an employee to use in their role and both parties choose to include the cost of the car in the salary package.
Let’s start this explainer with a definition: novation essentially means to replace an obligation with another obligation or one party to a deal with another. A Novated Car Lease is a financial agreement between an employee their employer and the lender who is financing the car purchase.
Novated Car Leasing with Salary Sacrificing: Key Features
- The employee selects the car they want and Jade arranges the best car financing deal available at our signature low interest rates.
- The employee then ‘novates’ the lease contract to their employer. That is, the employer replaces the employee as the party to the lease contract.
- The employer covers the car expenses and deducts them from the employee’s pre-tax income. So the employee is ‘sacrificing’ income in return for a fully-maintained motor vehicle.
- Fixed monthly lease payments paid by the employer for the fixed term of the consumer car lease.
- Leasing terms from 12 months to 84 months, depending on the value of the vehicle.
- Residual determined according to ATO guidelines.
- Employers can also covers the operating costs, eg insurance, rego, petrol, servicing, of the vehicle.
- Employer deducts the lease payments and operating costs from the employee’s pre-tax salary.
- Employer receives the tax deductions, claims GST and addresses any FBT issues according to ATO guidelines.
- Employee has a reduced taxable income, possibly pays tax at a lower rate and receives more net income and the use of a full maintained motor vehicle.
- When all payments including the residual are finalised, the ownership of the car reverts to the employee.
Your consultant can elaborate further on the details and benefits of Novated Car Leasing with Salary Sacrificing for both employee and employer. This type of car finance can be utilised by full-time and part-time employees for the purchase of both new and used cars.
While many lenders offer this commercial finance product, Jade, as a car loan broker, has the resources to consider novated lease offers from many more sources. We present you with the best deal available on the market to suit your individual requirements and structured to suit your business.
Speak with a Jade Consultant to discuss a novated car leasing solution for your business vehicle. Call 1300 000 003
