Novated And Operating Leases - For Imports

[QuickR33Melb]

Hi all,

A bit of a tricky question that I hope some guys will be able to shed some light on for me.

Does anyone use a novated/operating lease for imports?

It’s a common practice at my work to use novated leases that breaks down as follows:

A car is purchased through Fleet Australia on behalf of the employee.

Repayments are then paid BEFORE tax for the period of the lease (say three years)

At the end of the lease the car has a residual value of say 30% which the employee can pay to own the car outright. This can be profitable as most cars don’t drop below 30% residual after three years which means you can buy the car and sell it at a profit.

The benefits of a novated lease are substantial for those of us earning in excess of $40,000-$50,000 are taxed almost half of each dollar for the top parts of our income. As the car payments come out 'pre-tax' our taxable incomes are therefore less.

In simple terms $10,000 repayments in one year only cost the employee $5,400 in “take home income”

Now the reason for my post. I want to novate lease an R34 GTT however my company will only allow us to buy new so I want to get my own novated lease and charge the costs back to the company so I can get my import.

Does anyone do this already? If so which company are you novating through????

[Beeble]

Interested in this too. Last i heard it wasn't able to be done, it was strictly new cars only

[satanic]

I tried to get my car through a novated lease... answer was NO. Basically because it's a grey import that is not on their list of supported cars. Also, the car is "too old" the be considered for their terms and conditions (they need a relatively new car so that they can still make money when they sell it off)

Besides, since these types of arrangements include all on-road costs (insurance, fuel, and rego etc.) I don't think they would bother with a car that they have very little return on.

[paulr33]

i was one of the last few guys to get a skyline through prosperion cos they chagned their rules, well the underlying esana did. no more grey imports. i had mine on a 2 year lease.

all tyres maitenance servicing rego insurance was paid for as part of the lease and i had pre tax payments come out of my wage. i then got taxed on the change. so in theory you get paid less and pay less tax and get a car as result. had no issue with payout figure or anything and all was happy. got a fuel card too so more optimax than you can poke a stick at. a friend has an xr6 turbo on a lease too. it's a ute so you don't pay FBT cos its not considered a "benefit" as it only has two doors and two seats. mine was considered a "benefit" so i had to pay FBT. but in the whole scheme of things FBT aint that much. you dont have to record ODO for fuel but it is recommend to. you get posted each quarterly fuel report and ODO readings.

youll've have no chance of getting a grey import on lease IMHO, damn nice if you do though. I asked a few places re: GTR33 or GTR34 and none were keen to touch it after esadan had said no more grey imports

[raz0r$harP.UK]

Depends on your provider, a lot accept second hand veheicles subject to conditions. Our one had the proviso that so long as the car was no older than eight years old at the end of the lease it was okay.

//edit: subject to their final approval on the choice of vehicle

[woolls]

Hi, I lease my R33 through NLC, This is the company my work deal with. My lease covers everthing, ie: fuel, services, tyres, maintance insurance. Its all part of the package. i was the first person to lease an import through NLC so the paperwork took a bit longer. Its a great way to pay less tax and get the car you want.

[ferni]

My R33 GTR is on a novated lease.

I had trouble getting it on the GTR tho. THey didn't want to do it because they had a rule of 'no car older than 5 years at the end of the lease' or something along those lines. I did manage to drag out of them that it was just the finance part they didn't want to do. So i asked if i could find external finance, they said yes. I found external finance via NLC via maquarie... they rigged it all up and off i go... thats the short version it was a little bit more of a struggle than that, but i got it in the end. 4 year lease... all lease repayments/maintence/petrol/insurance pre-tax... but yes i do have to pay FBT, it still saves me thousands of $ per year.

QuickR33: your figures are a bit wack, if your making less than 58k per year, then you are in the 30% tax bracket, not the 47%... so your comment

"In simple terms $10,000 repayments in one year only cost the employee $5,400 in “take home income”"

should be

"In simple terms $10,000 repayments in one year only cost the employee $7,000 in “take home income”' etc...

it depends on yoru tax bracket. most lease companies have calculators on thier website for novated lease.

There is also a novated lease WITH ECM (employee contrib meathod), which i'd recommend taking over a normal novated lease.. you'll save a bit mroe money again....

[blind_elk]

I did my R32 GTS4 through Novation Leasing Company (NLC Pty Ltd).

Level 3, 102 Albert Rd, S Melbourne

8699 7000

www.nlc.com.au

But that was nearly 6 years ago now. Can't hurt to talk to them

[saff_cossie]

Some good answers guys

What happens with modifications on a novated lease out of interest? Can you modify and are there any technicalities to watch for?

[ferni]

NLC is who got me my finance on my GTR for my works novating leasing company. They were very helpful.

As for modifications, wouldnt' you call that 'maintence' - i do

"ohh my exaust broke, i need a new one, maintenence"

"my wheels were buckled, o well need a new set"

only thing you need to watch out for is insurance, like any other insurance policy.

[xRHETTx]

mmmm.... makes me want to get a proper job

[akeenan]

how would one go about getting a leased car. Do you just ask your work or something and use it only for work purposes ... can anyone do it? company permiting of course ....

[akeenan]

actually i just checked the nlc site

http://www.nlc.com.au

how easy is it to convince your employer to lease a car?

[saff_cossie]

NLC is who got me my finance on my GTR for my works novating leasing company. They were very helpful.

As for modifications, wouldnt' you call that 'maintence' - i do

"ohh my exaust broke, i need a new one, maintenence"

"my wheels were buckled, o well need a new set"

only thing you need to watch out for is insurance, like any other insurance policy.

<{POST_SNAPBACK}>

I had completely forgotten that lingo! Why of course it is maintenance. I used to use the same one with parents on their cars when I was at uni.

"The stereo has chewed up my tape, I need to repair it with a CD player"

"The CD player I put in, was too powerful for the speakers and has blown all the speakers, so I had best sort those out now"

End of uni my dad asks me why he has 6x9's in the back of the car, a changer and sub in the boot and a Sony headunit with more buttons than an aircraft flight deck that he is never going to understand :lol:

Ah good old maintenance :lol:

[blind_elk]

Some good answers guys

What happens with modifications on a novated lease out of interest? Can you modify and are there any technicalities to watch for?

<{POST_SNAPBACK}>

Generally, you still own the car, so I guess you are free to do anything (legal) that you want to it. You will need to cost any intended mods into the lease cost, because you will end up paying for them one way or the other.

[paulr33]

yeah mods are fine just have the workshop fit what you want and get them to charge it back to the lease company as like new wheel bearings, new bushes for suspension that sorta stuff and its fine.

[Duncan]

yep basically anything you modify is maintenance which is nice. Even consumables like r tyres! Not to mention tax deductible petrol.

But be aware that 48.5% tax doesn't kick in until $95k this year, and it is going to $120k next year....which means that far fewer people are in the top bracket and so it is less worth getting a lease....check the figures carefully

[Mean_R34]

I also believe that you need to do a minimum of 25,000kms a yr to make the package worthwhile.

I wouldn't mind looking into this, but that requires too much brainpower!

[saff_cossie]

I visited the site above and did some calculations on their slidy scale based on purchase price, salary and KM's and I would work out about $500 better off doing it that way. Think I will stick with the one I am with currently for ease.

Interesting read guys

[ferni]

Yep, Duncans right about tax brackets... but you don't need to be in the highest tax bracket to have it work out better.

Mean_R34 is right as well, if you do less than 25,000ks in a FBT year you pay 20% FBT, if you do 25000-40000 you pay 11%, anything over 40000/y is 9% FBT....

saff_cossie, The sites probably didn't include all the maintence you would use - that would all be pre-tax and GST free

Like i said, mine saves me a few grand a year.... I even bought my new gearbox via the least... so that would of cost me $3300 out of my pocket if i didn't do it through the lease, but since i did, i got the GST back ($300), and it was pre-tax, so lets say i was in the 30% tax bracket, that would save me another 30% since its paid for pre-tax... so it now cose me closer to $2,000 rather than $3,300.... saves me $1,300 right there.... if your in a higher tax bracket, you'll save even more....

As for the others who asked how you get it, your company has to offer novated leases - its a bit of paper work and hassle for them, and most companies would probably say 'no, its to hard'...