Anyone purchasing on a Novated Lease?

[paulb351]

my car is auto and petrol wasnt included everything else annaul mileage was 8000 kms
Paul how do ou figure its a dead end proposition there are tax advantages still maybe not as higher as before but over the 5 years its over 12k in tax benefits

Because you need to pay (if less than 15k km per year) 26% of the original taxable value of the vehicle each of the first 4 years then 3/4 quarters of the value in fbt tax when you get a discount for the remainder of the lease life. The only way notation may work is to buy a low value vehicle and spend a large amount in fixing it up, so that you maximise the savings on operating costs as you save on gst over the life of the lease.

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[ozracer]

okay cool that being the case though if you had a low interest loan and paid for everything yourself are you saying that you would still be better off than with a lease over the same period to your bottom line

 

[ozracer]

by the way thanks this is the exact information I was after

 

[paulb351]

okay cool that being the case though if you had a low interest loan and paid for everything yourself are you saying that you would still be better off than with a lease over the same period to your bottom line

I'm saying low interest alternatives may be a better option. I.e now days almost always are...

To be accurate, the fbt is calculated by taking your vehicle purchase price less stamp duty, rego etc and then using the statutory method the percentage is applied. That number is then grossed up and the top marginal tax rate applied to the grossed up amount to arrive at fbt payable so not just 26% of the purchase price, effect is a number slightly less than the simple calculation.

Get your accountant to run the numbers to do an accurate assessment. I found with my last lease that the tax savings were lost to fbt, admin charges from the lease company and an expensive interest rate on the lease as they hide that info in all the Mumbo jumbo.

Also, don't believe the "at the end I can hand the car back", if you do that they sell the car at auction (low price), charge you fees for disposal and then you are still obligated to pay the residual less the proceeds of sale. Always pay the residual and if needs be sell the vehicle yourself for a much better financial outcome.

 

[paulb351]

okay cool that being the case though if you had a low interest loan and paid for everything yourself are you saying that you would still be better off than with a lease over the same period to your bottom line

To simplify, fbt payments over 5 years are approx $70k alone. As for friends with balances in their lease account, think of that as paying more for your weekly beer and then after 5 years of drinking they give you your own money back 5 years late!

 

[apsilon]

Hi all, just joined recently to do some research as I'm looking to buy or lease a GT. Sorry to dig up an old thread but I was wondering if anyone else went down the lease path?

Given there's still around a year wait I'm thinking of negotiating a deal now and then closer to delivery decide if I should lease or just buy outright. There is still some financial benefit for me to lease but on the other hand having to deal with a lease company can be a pain from past experience.

Wondering if anyone's willing to share (PM me if you prefer) what their lease provider was able to negotiate to get the car for if any cheaper than list price. I know demand is still high on these (they're still not on the Ford partner rebate list unfortunately) so trying to get an idea of what to expect if I negotiate it myself rather than the lease provider (and yes you can do that). Thanks.

 

[Sturty91]

Hi all, just joined recently to do some research as I'm looking to buy or lease a GT. Sorry to dig up an old thread but I was wondering if anyone else went down the lease path?

Given there's still around a year wait I'm thinking of negotiating a deal now and then closer to delivery decide if I should lease or just buy outright. There is still some financial benefit for me to lease but on the other hand having to deal with a lease company can be a pain from past experience.

Wondering if anyone's willing to share (PM me if you prefer) what their lease provider was able to negotiate to get the car for if any cheaper than list price. I know demand is still high on these (they're still not on the Ford partner rebate list unfortunately) so trying to get an idea of what to expect if I negotiate it myself rather than the lease provider (and yes you can do that). Thanks.

The sooner you order the sooner it gets here, waiting times are looking to Blowout to 18 months again I heard.

 

[ssb]

For lease price a friend of mine got the car for no discount, but the dealer delivery was eliminated which can amount to a $2k saving off the on road price.

 

[GAFA]

Mine is leased. My company allows us to use two lease companies and I approached them both. One lease company didn't have the 2015/16 model in their system so the numbers they provided were a guess, plus they could not get a discount.

Second company (I'd used them for my previous cars) had the car in the system and were able to negotiate a small discount, so I went with them.

One advantage using a lease company is you do not need to put down the $1000 most dealers ask to secure a slot.

 

[noboot]

One advantage using a lease company is you do not need to put down the $1000 most dealers ask to secure a slot.

Even if you do put that money down the price of your car ends up being that much cheaper.

 

[Frostee]

Even if you do put that money down the price of your car ends up being that much cheaper.

Agreed, and remember there's a further price increase suspected at the end of this year.

 

[apsilon]

For lease price a friend of mine got the car for no discount, but the dealer delivery was eliminated which can amount to a $2k saving off the on road price.

Thanks, that's useful. Reinforces that my guess of trying for between $60k and $61k on road.

Mine is leased. My company allows us to use two lease companies and I approached them both.

I'm the same, we have two providers we can use. I've used others in the past and I'm really not a fan of having to deal with them but there is some financial incentive. I've approached both with some queries but neither seem sure of how to handle it.

Given the time to delivery if I order now I may be looking at MY18 which is an unknown. We know it's getting a face lift but that could be good or bad. It'll likely mean some feature/spec changes and possible colour changes. One of my questions was what if I don't like the changes or the colour I want becomes unavailable? Can I cancel? They didn't know or didn't want to say, just wanted to provide an estimate. I know the odds of it coming to that are next to none but I like to have everything nailed down before entering into a contract.

Might visit the local dealer on the weekend and feel things out a bit.

 

[Zepboy]

I've leased through SmartSalary and am very happy with the financial implications. Given that I was always going to have to finance it one way or another, I did all the calculations myself and leasing, plus paying the residual will see me about $12000 better off over 5 years.
Having said that, the difference is mainly in the loan costs. All the other bits and pieces (tyres, fuel, rego etc), well I was going to pay those anyway.
Of course the leasing company gets $1250 out of me over the 5 years ($250 per year).

BUT.......here's the thing. If you can fund the purchase price without resorting to a loan, or perhaps your company offers some super cheap discount loan, or you've just got cash lying around.......or even if you can just redraw off your mortgage (but pay it off rapidly), you're going to be far far far far better off doing that.

 

[RubyVert]

Just something to take into consideration when looking at a novated lease - If you are looking to borrow for a mortgage in the near future then the full amount of the lease will be deducted from your income or it will be a liability reducing your income and reducing your ability to borrow.
As a mortgage broker I see this regularly - it's almost a double dip for lenders because they calculate your HEM or monthly living expenses plus deduct the lease payments as well off your income.
Unless you are a high income owner then it's less of an issue.

Cheers

J

 

[apsilon]

Well most dealers not surprisingly didn't want to negotiate. In fact most are still asking ~$5k above list. Found one close to home that went down to just under list so put a deposit down. Might've got a bit cheaper with more shopping around or letting the lease company deal with it but end of the day $1k isn't going to change my life. Now the wait begins. Have a year to decide if I just pay for it or lease it. Meeting with the accountant soon so I'll have him run the numbers.

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