Novated Lease Versus Car Loan

We break down the advantages of each form of vehicle finance. It doesn’t matter which way you would prefer to get into your new car, Salary Packaging will make it happen, easily, quickly and for the least cost to you.

What is a Novated Lease

Novated leasing is a cost effective way to get into your next vehicle. In essence the everyday running expenses that you would normally incur are incurred in Pre Tax and a GST free arrangement. What this means to you as an employee is that you get to pay for items that you would normally purchase after tax such as fuel, rego, insurance, tyres, servicing, roadside assistance and finance payments out of income that has not been taxed!

What is a Car Loan

A car loan is a loan that establishes consumer credit that is granted for personal use; usually secured and based on the borrower’s integrity and ability to pay. Repayments only include the financed amount of the vehicle. No runnings costs are included.

ADVANTAGES OF A NOVATED LEASE

  • Save GST on the price of the vehicle
  • Save GST on petrol, maintenance and service cost
  • All running costs included. Fuel, Rego, Insurance, Servicing, Roadside, and repayments
  • One easy repayment each pay cycle via regular lease repayments are arranged through your employer and deducted directly from your salary
  • Reduce your taxable income, thus saving you tax every pay cycle
  • Extremely competitive pricing on the vehicle of your choice, our buying power means your save! Tap into our fleet buying power 
  • You don’t have to use the car for business purposes to save tax under a novated lease arrangement
  • A novated lease can be arranged for new or used cars
  • Leases can be transferred to a new employer

DISADVANTAGES OF A NOVATED LEASE

  • Includes a balloon payment at the end that you need to be aware of and prepare for. Most people trade the car at the end of the lease, cover their balloon repayment and get into a new car for a very similar cost
  • Can take longer to establish than a car loan due the amount of paperwork Salary Packaging Australia establish and this is taken care of for you
  • Requires your payroll person within your organisation to set up the deductions in their payroll system. We assist with this
  • Requires your organisation to understand the benefits and want to offer this to their employees. We haven’t met a boss who didn’t want their staff to save money that’s for sure

ADVANTAGES OF A CAR LOAN

  • Quick to get into your new car. Depending on personal circumstances, SPA can get you approved anywhere between 1 to 6 hours.
  • Flexible contracts up to 84 months
  • No deposit loans are available
  • You can make additional payments to loan to pay out contract faster than anticipated. However this will incur an early termination fee
  • Balloon Payments available TAP
  • Tailored Payment solutions to suit
  • Does not require your Payroll or Boss to sign any paper and process each pay
  • Ability to customise your vehicle with accessories and features you want to include

DISADVANTAGES OF A CAR LOAN

  • Doesn’t include running costs, eg Fuel, Registration, Finance, insurance etc
  • Does not provide a tax saving benefit by salary packaging the costs
  • Cannot claim GST on purchase price of car
  • Cannot claim GST on running expenses

Check out our comparison of our Car Loan and Novated Lease deals

2017 MAZDA 3 Neo Manual Hatch Comparison

Car Loan

FROM $90 PER WEEK

Our Price $19998

5 year term (60 monthly Payments)

No residual or balloon payment

Drive away price includes 12 months registration, 12 months CTP, maximum dealer delivery charge and stamp duty.

Novated Lease

FROM $135 PER WEEK

Our Price $ 18416

Tax savings over 5 year term

$ 12913

PRICE INC. ALL RUNNING COSTS; Fuel, servicing, tyres, rego and insurance. Which equates to:

 $3798 per annum ($73 per week)

2017 MAZDA CX5 Maxx FWD Auto Comparison

Car Loan

FROM $140 PER WEEK

Our Price $30998

5 year term (60 monthly Payments)

No residual or balloon payment

Drive away price includes 12 months registration, 12 months CTP, maximum dealer delivery charge and stamp duty.

Novated Lease

FROM $176 PER WEEK

Our Price $ 28333

Tax savings over 5 year term

$ 12900

PRICE INC. ALL RUNNING COSTS; Fuel, servicing, tyres, rego and insurance. Which equates to:

 $3992 per annum ($77 per week)

Toyota Prado GXL T/D Auto Comparison

Car Loan

FROM $271 PER WEEK

Our Price $60400

5 year term (60 monthly Payments)

No residual or balloon payment

Drive away price includes 12 months registration, 12 months CTP, maximum dealer delivery charge and stamp duty. 

Novated Lease

FROM $294 PER WEEK

Our Price $ 54764

Tax savings over 5 year term

$ 15235

PRICE INC. ALL RUNNING COSTS; Fuel, servicing, tyres, rego and insurance. Which equates to:

 $4913 per annum ($94 per week)

Car Loan Terms & Conditions

(a) $90 (b) $140 (c) $271 per week is available to approved personal applicants to finance the purchase of (a) 2017 Mazda 3 Neo Manual Hatch (b) 2017 Mazda CX5 Maxx Auto FWD (c) Toyota Prado GXL T/D Auto. Driveaway price of (a)$19998 (b) $30998 (c) $60400 with 60 monthly payments in arrears. Based on an annual percentage rate of 5.95 %. Terms, conditions, fees and charges apply. Offer valid until 31/07/2017. Comparison Rate of 6.48% is based on a 5 year secured consumer fixed rate loan of $30,000. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Salary Packaging Australia is a representative of Connective Credit Services Pty Ltd, Australian Credit Licence 389328 CRN 480205. Drive away price shown includes 12 months registration, 12 months compulsory third party insurance (CTP), a maximum dealer delivery charge and stamp duty and is based on supply in SEQLD. Offer ends 31st July 2017. Information such as interest rates quoted and default figures used in the assumptions are subject to change. Subject to lending credit criteria, terms and conditions, fees and charges apply and your full financial situation would need to be reviewed prior to acceptance of any offer or product.

View our other options for cost-saving finance

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NOVATED LEASING

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REMOTE AREA BENEFIT

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SALARY PACKAGING

Salary Packaging Australia (SPA) does not provide financial or taxation advice. SPA recommends to you seek independent financial/taxation advice prior to entering into any salary packaging arrangement. This quote may be subject to change even after acceptance.

The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for the product. Individual institutions apply different formulas. Information such as interest rates quoted and default figures used in the assumptions are subject to change. Subject to lending credit criteria, terms and conditions, fees and charges apply and your full financial situation would need to be reviewed prior to acceptance of any offer or product.