Salary sacrificing is the smart way to get your hands on more of the goods and services you need while keeping more money in your pocket each pay day. It does that because those goods and services are paid for out of your pre-tax income, not your pay after it's been taxed.
Owning a car is probably one of your biggest financial commitments, so when you salary sacrifice a car through a novated lease, those savings really add-up.
Perhaps you already know about the benefits of novated leasing but thought it all sounded a bit too difficult? Well relax, because here's a simple 6-step guide to show you just how easy it really is.
1. Is a novated lease right for you?
Your first step is to see whether a novated lease is the right choice for you. If you've just started a new job then you'll have to wait until the end of your probationary period to be eligible for a novated lease. Ask your employer.
A novated lease reduces your taxable income and may even put you into a lower tax bracket, which can save you a lot of money. However, it’s best to seek independent financial advice before making any decisions. At this stage, it’s worth getting a quote for a novated lease from Fleetcare so that you can discuss your potential savings with your accountant or financial planner.
2. Talk to the boss
Unless you work for the government, or your employer already offers salary sacrificing, you may have to convince the boss that there's advantages for them to offer novated leases to their employees.
You can start by explaining that a novated lease is the pay rise you give when you're not giving a pay rise. The employee has more in their pocket without the boss paying them more.
It's also a great way to attract and retain quality staff and it's extremely simple to administer. Fleetcare does all the administrative work for them. They'll also be paying less in payroll tax and Workcover.
Another benefit for the boss is that they won't be burdened with a car if you leave because you'll be taking the vehicle with you.
3. Find the car you want and all those extras
Now here's the fun part: get on the web, do your research and find your perfect car with all the extras you really want.
After that you can leave all the hard work of negotiating the best deal to the team at Fleetcare. Our bulk buying negotiating strength means you’ll get the best possible price, even if you've already chosen the dealership. And if you're in the market for a used car, that's no problem at all. There may be restrictions on the age of the vehicle (for example, if the vehicle will be older than 10 years at the end of the lease) but all used vehicles are assessed on a case-by-case basis.
4. Calculate your savings
Your Fleetcare Novated Lease Consultant will help to determine the impact the lease will have on your income. We'll find the perfect lease for you based on factors such as how much you drive and the length of your lease. We'll also tell you about discounted fuel, GST savings, tax deductions and how Fringe Benefits Tax will be calculated into your lease agreement. At the end of this stage, you’ll have a detailed quote with the exact amount that will be deducted from your salary each payday. Why not calculate your potential savings with our Novated Lease Calculator, and see how much you can save!
5. Do the paperwork
And now for the boring bit – the paperwork. But don't worry, it's really not that onerous, it's just three simple steps.
It starts with the salary deduction authority detailing how you and your employer are both happy with the salary sacrificing agreement.
Next is that all-familiar finance application that will ask you about your financial obligations, assets and liabilities and monthly income and expenditure.
Your last obligation is the lease application. If there's any extra paperwork, don't worry, because Fleetcare is here to help you through with it.
6. Drive your new car away
Finally there's the best bit of all. You drive away in your new car, happy in the knowledge that you've saved on the purchase price and running costs and that you'll be paying for it through one easy fortnightly or monthly payment. Your taxable income has reduced, and by taking out Fleetcare's comprehensive insurance policy and lease protection insurance, you're fully insured against accidents, theft and even losing your job.
Want to learn more about what happens at the end of your Fleetcare Novated Lease?