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People sometimes get confused or just don’t get that how novated lease works where the other side, idea of paying something which actually you don’t owe sounds a bit horrifying but it is certainly not. People do ask questions like – is novated lease worth it? Where the basic confusion can be eliminated by knowing what actually it is and how it works.
What it is and how it works?
Traditionally in purchase, there are two sides – one there is buyer and another seller but in innovated lease another participant is involved with primary role who is your employer. It is the way to foresee a potential in your new car to save you a lot of money. Avoid the confusion between the traditional loan and the novated lease as at whole it appears to be similar sometime. Any traditional loan is paid off from the remaining salary where tax already have been deducted but the novated lease is paid a before the deduction of tax from tour salary which benefit you to save lot of bucks. The whole and soul structure of the lease is rental and term range of 2 to maximum 5 years. During the lease period, you will be renting for the car and at last of the period, ATO will look out for the minimum value of the car which is also called Residual value (RV) and that amount t can pay off the rentals.
To coming at very question that – is novated lease worth it? It is now can be determined by you itself. You can see the novated lease is unlike any finance system, you will be renting for car which is purchased by company or employer on behalf of you which include all daily-car expenses with saving you from tax amount. It is complete money saver and more promising financial plan than others.
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