novated lease!

[sonjap]

Does anyone have a novated lease for their jeep?
Is it a good move?
Any traps that you find later?
Any advise is greatly appreciated..

[caseyg]

I used to work for a benevolent institution (a public hospital) and had a novated lease for my impreza. it was a great way to reduce my taxable income. working for benevolent institutions has some FBT (fringe benefits tax) advantages, other businesses are not afforded the same advantages. I would advise that you seek advice from a qualified financial advisor on this for your own situation.

[Evil Dolf]

Yeah mate... I've got my JK on a novated lease as part of my Salary package.

Obviously there are pro's and cons to it.

The best bit is all running costs are met by the lease company. Obviously you pay for it, but being able to book it in for a service whenever it needs to be done, not when you have the cash is great. Fuel cards are awesome.

The biggest downside I found, is that you're seriously restricted in modding your Jeep.

First thing is that you can't do anything to void the new car warranty.

Second thing, is that ultimately it's not your car. So once you're out of the warranty period, any mods you do, need to be able to be reversed.

Tyres can only be stock size, and you have to go through approved tyre stores. So you can put what ever rubber you like on, but it has to be stock size. A way around this is to buy a second set of rims and buy your own rubber!

Make sure you do your kilometerage! Fringe benefits tax is paid depending on your Ks... higher the Ks, lower the FBT rate. So if you do less that your nominated Ks, you'll be hit with an FBT bill. Likewise, if you go over, you'll get a refund. Running costs are worked out (averaged) at the end of the lease.

But it's great from a cash flow perspective, and it hasn't stopped me getting out and wheeling the JK.

Hope this helps!

[vk2jdh]

Even if you are on the top marginal tax rate, it can end up being more expensive. Depends on Kms travelled etc. If you have any work usage for the car check out the other arrangements on the ATO web site.

[jammy jeep]

both my jeeps are salary packaged. As noted above, there may be something in the contract that says you cant mod them, but what is their remedy if you do? I've had mine modded and salary sacrificed for the last 5 years without a problem. Most of your expenses are tax free. I save a fortune. Wouldn't buy a new jeep any other way.
Can't think of any downside at all.

[wj bear]

my only concern with novating my cars was and is the changes in fringe benefit tax. mrs has subaru at the moment, we've leased prade and rav also previously and it worked out ok as said above every cost is covered. makes it less confusing for me however im starting to think about just buying the next car with cash and trying it other ways. the nice thing about lease is that you know you can upgrade every couple of years.

[Army Barbie]

Going to bump this thread in the hope that more opinions may be added..

I'm thinking about getting a novated lease on a diesel Limited Grand in 6-7months but will make the final decision on the advice of a financial planner..

But who else in Jeep land has a novated lease? What are the pros and cons?