Ever heard your money-smart friends talk about a novated lease? Wondering what it is and how it works? Simply put, a novated lease is a deal between you, your boss, and a car finance company. But to see why it's worth thinking about, you need to grasp two key parts of novated leasing.

First, a novated lease lets you pay for your car with money you haven't paid tax on yet. This cuts down your taxable income, so you end up paying less tax. It's a win for anyone who pays taxes and is often called 'salary sacrificing' or 'salary packaging' in Australia.

Second, a novated lease covers more than just the car cost. It wraps up all your car-related expenses in one neat package. We all know owning a car isn't just about buying it or making payments. You've got insurance, servicing, and fuel to think about too. A novated lease lets you pay for all these using pre-tax dollars, saving you even more on tax.

Here are some other benefits of a novated lease:

More Money in Your Pocket

Besides the tax savings we talked about, there are other big wins. With a novated lease, you don't pay GST on the car's price or most running costs! On average, this saves $5,188 a year compared to regular car financing. Plus, we offer discounts on car-related expenses through special deals with our preferred suppliers. Check out our free online calculator to see how much you could save.

Easy Budget Planning

By bundling all your car costs into one easy payment, you know exactly what running your car will cost. No more surprise bills for insurance, fuel, registration, servicing, or tires. All these expenses come out of your salary automatically, so you can set it and forget it.

Pick What You Want

You can choose the car you want and use it however you like. You can buy a new or used vehicle and even lease more than one car in a family, though there are some age limits on used cars. When the lease ends, you can refinance, buy the car, or upgrade! It's up to you.

Room to Move

With a novated lease, the car is yours, not a company car. So if you change jobs, the lease might be able to move with you. If your new employer also offers novated lease deductions through their payroll, the lease can easily switch over. Or, you can pay off what's left on the lease.

Now that we've explained what a novated lease is and its benefits, it's easy to see why you might want to sign one. If you're a boss and you're interested in offering novated leasing to your workers, or if you want to learn more about the benefits of salary sacrifice and salary packaging, get in touch with us today.