There's a few other aspects, if you think your costs will be higher AND you have a seperate meter on your charging, you can claim actual costs. There is also the provision if you can determine percentage of home charging (easy with the Tesla) you can claim home charging using the 4.20 c/km using the pro-rata percentage and you can claim actual costs on any public charging.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Novated Leases
- Thread starter cafz
- Start date
Interesting, I’m being quoted 7.5% from SG. I also knocked off about $10/w ditching all the extras you mention and byo insurance.
Interest rate depends on the lease duration. There is a general opinion that it is best to go for 1-year lease (assuming you can pay your car straight away but just want to get that interesting discount so to say), but the interest rate is highest for 1-year leases.
Ahh. So could be better off going year by year. Plan is to keep the car after the 5 if it’s still going well
I guess it depends if you’re trying to reduce your taxable income then a longer period might add up.
embarrassingly I don’t know what my lease interest rate is, or even where to find it
I guess it depends if you’re trying to reduce your taxable income then a longer period might add up.
embarrassingly I don’t know what my lease interest rate is, or even where to find it
Don't be too concerned about any 'interest rates' you were quoted, as this is a lease not a loan, there is no 'interest' and so there can't be an interest rate. You can work out an 'effective' interest rate, but if you're just comparing to buying outright with cash or a regular car loan - you don't need an "interest rate" to do that.
And any so called "interest rates" can be calculated however you like, and can't be compared against other quotes - people may find they had a so called 10% 'interest rate', asked for it to be lower, and their '9%' rate was actually more expensive.
When comparing, it's the 'lease' or 'rent' amount - a $ amount - you would be comparing.
An example from Toyota Fleet Management - the "Rent" (and management fee) is the number you want to compare, not the "interest rate".
If you're curious, there are spreadsheets like this EV Novated Lease Calculators (posted in several Facebook groups) that can help you compare against your other options, and find an "effective" interest rate.
And remember that the amount financed - ie the car purchased price, will have the "commission" and other establishment and other fees, "profit" (nobody will rent you something for nothing!), but potentially other things too - like the "ECO Protection Pack" mentioned earlier, but also things like some add on insurance (redundancy protection, total loss etc) - which then all factor in as part of the "rent" amount.
tl;dr forget about the 'interest rate', as it can be whatever they want it to be - focus on the actual rent amount when comparing against other quotes (and remember that the rent is pretax)
--
For an EV, yes - the tax savings are better the longer the lease, whereas historically for an ICE car that wasn't FBT exempt, you would do a short lease instead for most value.
Not sure... In the case of NL I'm the registered driver of the vehicle. There is a bank loan behind it, with an unknown interest rate. There is something on top, which is taken by the NL company. This makes the interest rate, which is provided in the NL quote etc. At the end of the "lease", I end up at 53.12% of the car price paid out by repaying the bank loan. Also, however you call it, at the end there is a balloon/residual payment. There are, of course, all other payments on top like insurance etc, but still, what is the difference between lease and loan in this case?
Lease is a rental agreement. As I understand, formally lease payments cover the car depreciation, interest rate for lease company to pay, and something on top, but are not necessarily supposed to pay out the (depreciated?) value. One can and probably does adjust everything so the lease looks like a loan and the loan looks like a lease in the case of NL, but then, again, what is the difference?
But I may be very wrong with all this.
Last edited:
The vehicle belongs to the financier - they buy the car and rent it to you. It does not belong to you.
The NL company has nothing to do with this arrangement - they set things up to start with, collect their commission/kickback, and organising the novation and for your employer to pay the rent on your behalf.
They of course help set up a budget for running costs and then help pay/reimburse you for them (insurance, electricity, registration, etc).
The big practical difference is that if it were a loan you would own the car, and could pay off the loan early to save on interest.
Neither of these are true for a lease.
Remember that you're renting the car, you're not "paying it off" - so if you need to break the lease for any reason (including if the car is written off and can't be replaced) you may very well be up for all of those rent payments, and they'll be post-tax, not pre tax.
If you look at your lease terms and conditions, you may very well find that you are required to return the car at the end of the lease!
The 'residual' is the penalty for failing to return the car at the end of the lease.
For example, Macquarie (if they were the financier for your lease):
(https://www.macquarie.com.au/assets/bfs/documents/broker/asset-finance-introducer/finance-lease-terms-conditions.pdf)
However, if you don't return it - you pay the residual as a penalty (and the car is yours!)
In any case, the bank owns the car until it is paid off one way or another. I think this difference in the case of NL has a different nature, which is salary sacrificing. I can break the lease and pay it out straight away, but would there be any sense to do it as long as I don't have to do it due to, for example, sudden unemployment?
Well, I do pay it off, because at the end of the lease I owe less than the drive-away price at the time of purchase. It has decreased, from where?
But in practical terms, again, what is the difference?
You owe them a car at the end of the lease. Or alternatively you don't return the car and end up owing them the residual value. That's less than the original purchase price because the finance company agrees that the vehicle's value has gone down.
At the end of the day it's all done with a nudge and a wink because the ATO requires it to be a "genuine lease" for the tax benefits to apply. NO SIR there is no agreement for us to sell the car to you for a particular price at the end of the lease... but definitely don't FAIL TO RETURN IT or you'd owe us A CERTAIN AMOUNT OF LIQUIDATED DAMAGES... no, definitely don't FAIL TO RETURN IT, that is certainly not what we want.
Maximillan
Member
With the $400 initial order fee it says on my invoice “to be refunded to customer” and it wasn’t deducted off my final invoice price. I just picked my MY up on the weekend, does anyone know how to organise that refund, or is it done automatically at some point? I paid it but just want to make sure it comes back to me and not the NL
Need to do the difference to your pay amount.. Then add insurance, rego, tyres and service.
For me $252 a week.. $39,379 over 3 years plus $32,402 balloon. equals $71k. - around 10k insurance etc . $61k
M3 cost me $65850. I am up $5k after 3 years
MY out pocket $296 a week $46k + $35k Balloon. $81k.. $12k insurance etc.. $69k total vs $74590 price again around $5k up.
Both amounts was close to a green loan would be although you get the rego, insurance etc included.
It will come back to you from Tesla. The MY came back 7 days later.. refund to credit card
The M3 they had to do plus trade in $.. took 3 weeks was paid as more $ into my bank account.
Similar threads
