Salary Sacrificing - Novated Car Leasing

Discussion in 'Money Management & Banking' started by tc123, 24th Apr, 2012.

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  1. tc123

    tc123 Tom

    Joined:
    1st Jul, 2015
    Posts:
    38
    Location:
    Australia
    Wondering if Novated Leasing/ Salary sacrificing is a good thing?
    Does anyone else do it? Pro's & Cons?

    I dont really need a car for work, in fact I get the train to work every day and only drive my $4000 car (fully owned outright) 2km per day!

    Is it worth it for the tax benefits?
    From what I understand, the 'repayment' for the car lease comes out of your pre-taxable income..
     
  2. GregReid

    GregReid Well-Known Member

    Joined:
    1st Jul, 2015
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    Location:
    Melbourne
    Tom,
    A quick answer is that if you are doing something just to get tax benefits, then its not worth doing.
    Purchasing a new or near new car when you hardly use it sounds like a poor investment to me, where the car is a depreciating asset.

    Unless you are in a company or organisation where you get exempt or concessional fringe benefit tax treatment, salary sacrificing for a novated car lease generally does not save you any money.

    Greg
     
  3. TDFawaz

    TDFawaz Tony

    Joined:
    1st Jul, 2015
    Posts:
    21
    Location:
    Brisbane, QLD
    My issues with novated lease

    Hello,
    I actually had one of these a while ago and I had an issue when I wanted to quit my job and get another job - to get a new employer to agree to take it over.

    Because if they couldn't, then I couldn't afford to keep it. I was stuck with it all.

    I was stressed out about it but it all worked out ok. I ended up keeping my job after I spoke to my boss about my issues!!
     
  4. something_wrong__

    something_wrong__ New Member

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    Location:
    here and there
    It works for me but i do about 25,000 - 30,000km per year for work,

    So i have kept a log book and run about 90% business use, I do a log book every year, even though i dont need to, but it gives me the security of knowing i can justify my tax claim each year.

    I used to drive a dual cab ute but now have a Sportswagon due to role change.

    If you do that little KM i doubt it would be worth it, especially as i think they have changed the fringe benifit tax rate, Best bet speak to a accountant.
     
  5. realestate_basket

    realestate_basket Member

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    1st Jul, 2015
    Posts:
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    Location:
    Sydney, Australia
    Totally agree with Greg here. It's not a good idea to buy something for tax benefits when you don't actually need it. Having a car adds lots of extra expenses such as insurances and maintenance any way.
     
  6. TSK

    TSK Well-Known Member

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    14th Apr, 2018
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    Location:
    VIC
    just keep an eye on on your employer super contributions too - not sure if the law has changed recently but they could reduce the amount they paid if you salary sacrificed.
     
  7. Little Tim

    Little Tim New Member

    Joined:
    22nd Dec, 2016
    Posts:
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    Location:
    VIC
    Getting a novated lease is actually expensive but is offset but the tax benefits. The main con of it is as mentioned - you can lose that benefit if and when you move to another job which does not offer the salary sacraficing.
     

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