Thanks Reece! Love your work. I just watched your previous video and was stocked to see you posted this one only 18hrs ago! I think I have finally gotten my head around novated leasing and the calculations that go with it. Keep up the excellent videos!
You need to have a live example in a spreadsheet that you can share in your presentation. Sitting there for 10mins talking without visual aids disengages your audience. In other words the topic is interesting but your audience need a real life example in Excel that they can understand. Also to note that not all running costs/finance costs are deducted pre-tax. There is a limit I think under FBT guidelines of what is allowed to be deducted from your salary pre-tax. Otherwise the balance of your cost is taken out post tax. I know this from my own current novated lease which has a mix of pre-tax and post-tax deductions from my salary to pay the lease/running costs. Cheers
I appreciate your input. It's challenging to offer specific examples that resonate with a diverse audience given the multitude of factors influencing someone's decision to take out a novated lease. I understand where you're coming from though as there is a lot of information to digest!
I gave serious consideration to a NL when I picked up a job doing 1000km a week. End of the day the 2015 RAV4 was going to do the job just fine and a Novatel lease was saving me a little money in buying me an ever depreciating asset. 15k should get anyone a reliable car to get you from a to b
Just watched the first and second videos... great information and well explained. I was wondering if I could get your thoughts on if a novated lease was worth it for me? I drive approximately 35,000 - 45,000 km's for work each year. My salary is roughly 100k per annum. Work already pays for services, repairs, and fuel. And I would be in the market for a tradie type 4x4 (hilux or something similar?) I really appreciate any and all help you could provide before I take further steps towards a novated lease. Thanks.
I found that Novated leases are not beneficial if we take it for 2 years. If the Novated lease is for 3 or more years, there are serious benefits from the lease over financing the car.
@@ReeceCaruso I recently went for a 40000 car. The quote was for 1622 per month ( less Tax benefit of 320) which makes it 1300 per month. Residual value including GST is at 22400 which comes to 53600. For purchasing on Finance it works out to 42500 car cost including interest + 3000 insurance for 2 years + 4800 for fuel for 2 years which makes it 50500. If it is for 3 or more years, found that Novated lease works much better than outright purchase.
Hi Reece, awesome video! I need some advice please 🙏 I just received a quote from an organisation and it states Novated Lease Car amount = $51,166.72 Total Salary packaging deductions $629.43 Estimated out of pocket $482.02 per fortnight Estimated savings over life of lease (5 years) $31,912.35 Giving you a convenient on road budget of $153.82 per fortnight Total amount financed $54,000.51 Total residual value $15,832.52 (28.13%) What portion of this is going towards paying off the car amount per fortnight? And what’s the amount I get access to per fortnight for rego, fuel etc. Is the Novated Lease worthwhile for me based on these numbers? FYI My gross salary = $105,000 Electric Plug in Hybrid vehicle (BYD Sealion 6) retails at $52,990 Thanks!!
What happens if at the end of the lease you don’t want to do the balloon payment & there’s a little damage eg scratches/small dent…would you still have to pay the balloon payment?
Whether or not you have to pay the balloon payment at the end of a lease agreement typically depends on the terms outlined in the lease contract. In many cases, if you choose not to make the balloon payment, you would have to return the leased vehicle to the lessor (the company or individual who provided the lease) in a condition that meets certain standards. If there is minor damage to the vehicle, such as scratches or a small dent, the lessor may assess this damage and potentially charge you for repairs or restoration as outlined in the lease agreement. The cost of repairing such minor damage might be deducted from your security deposit, or you may be billed separately for it. However, if the damage is beyond what is considered normal wear and tear, or if it violates the terms of the lease agreement, the lessor may have grounds to charge you additional fees or penalties. In some cases, if the damage is significant, the lessor may require you to pay for repairs before returning the vehicle. Ultimately, it's crucial to carefully review the terms of your lease agreement to understand your obligations regarding the balloon payment, the condition of the vehicle upon return, and any potential charges or penalties for damages.
you should really use visual aids to support your examples - it gets confusing very fast with a lot of figures being thrown around
Thanks for the feedback! Will make sure I put some in future videos!
Thanks Reece! Love your work. I just watched your previous video and was stocked to see you posted this one only 18hrs ago! I think I have finally gotten my head around novated leasing and the calculations that go with it. Keep up the excellent videos!
Thank you for watching! What were your biggest pain points with the calcs?
You need to have a live example in a spreadsheet that you can share in your presentation. Sitting there for 10mins talking without visual aids disengages your audience. In other words the topic is interesting but your audience need a real life example in Excel that they can understand.
Also to note that not all running costs/finance costs are deducted pre-tax. There is a limit I think under FBT guidelines of what is allowed to be deducted from your salary pre-tax. Otherwise the balance of your cost is taken out post tax. I know this from my own current novated lease which has a mix of pre-tax and post-tax deductions from my salary to pay the lease/running costs. Cheers
I appreciate your input. It's challenging to offer specific examples that resonate with a diverse audience given the multitude of factors influencing someone's decision to take out a novated lease. I understand where you're coming from though as there is a lot of information to digest!
@ReeceCaruso Imagine if there was no FBT payable on a novated lease. Happy days, for sure.
This was exactly what I was after! Awesome video
Glad it helped!
I gave serious consideration to a NL when I picked up a job doing 1000km a week. End of the day the 2015 RAV4 was going to do the job just fine and a Novatel lease was saving me a little money in buying me an ever depreciating asset. 15k should get anyone a reliable car to get you from a to b
Agreed but people still go for them
At least they are now informed
Just watched the first and second videos... great information and well explained. I was wondering if I could get your thoughts on if a novated lease was worth it for me?
I drive approximately 35,000 - 45,000 km's for work each year.
My salary is roughly 100k per annum.
Work already pays for services, repairs, and fuel.
And I would be in the market for a tradie type 4x4 (hilux or something similar?)
I really appreciate any and all help you could provide before I take further steps towards a novated lease.
Thanks.
I found that Novated leases are not beneficial if we take it for 2 years.
If the Novated lease is for 3 or more years, there are serious benefits from the lease over financing the car.
Interesting
Any key points you want to share?
@@ReeceCaruso I recently went for a 40000 car. The quote was for 1622 per month ( less Tax benefit of 320) which makes it 1300 per month.
Residual value including GST is at 22400 which comes to 53600.
For purchasing on Finance it works out to 42500 car cost including interest + 3000 insurance for 2 years + 4800 for fuel for 2 years which makes it 50500.
If it is for 3 or more years, found that Novated lease works much better than outright purchase.
Very interesting! Thank you for sharing
Hi Reece, awesome video! I need some advice please 🙏
I just received a quote from an organisation and it states
Novated Lease Car amount = $51,166.72
Total Salary packaging deductions $629.43
Estimated out of pocket $482.02 per fortnight
Estimated savings over life of lease (5 years) $31,912.35
Giving you a convenient on road budget of $153.82 per fortnight
Total amount financed $54,000.51
Total residual value $15,832.52 (28.13%)
What portion of this is going towards paying off the car amount per fortnight? And what’s the amount I get access to per fortnight for rego, fuel etc.
Is the Novated Lease worthwhile for me based on these numbers?
FYI
My gross salary = $105,000
Electric Plug in Hybrid vehicle (BYD Sealion 6) retails at $52,990
Thanks!!
What happens if at the end of the lease you don’t want to do the balloon payment & there’s a little damage eg scratches/small dent…would you still have to pay the balloon payment?
Whether or not you have to pay the balloon payment at the end of a lease agreement typically depends on the terms outlined in the lease contract. In many cases, if you choose not to make the balloon payment, you would have to return the leased vehicle to the lessor (the company or individual who provided the lease) in a condition that meets certain standards.
If there is minor damage to the vehicle, such as scratches or a small dent, the lessor may assess this damage and potentially charge you for repairs or restoration as outlined in the lease agreement. The cost of repairing such minor damage might be deducted from your security deposit, or you may be billed separately for it.
However, if the damage is beyond what is considered normal wear and tear, or if it violates the terms of the lease agreement, the lessor may have grounds to charge you additional fees or penalties. In some cases, if the damage is significant, the lessor may require you to pay for repairs before returning the vehicle.
Ultimately, it's crucial to carefully review the terms of your lease agreement to understand your obligations regarding the balloon payment, the condition of the vehicle upon return, and any potential charges or penalties for damages.