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#1 | ||
Regular Member
Join Date: Jan 2005
Posts: 50
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Hi,
I just have a general question and hoping someone may help. I'm at the beginning of researching a Full Maintained Novated Lease through work and I got a few quotes to help me find a good price point. I've noticed in the quote they have allocated $1100 a year to tyres and I've only request a 24 month period with 10,000k's per year. Would anybody know if I went ahead with that cost and I got a car that didn't need new tyres when I had it.. I would get that money back? Same for fuel as well? If they overbudget and I go under do I get it back? It's also being costed Pre-Tax which would mean I would have to pay tax if I did get it back? Thanks, |
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#2 | ||
FF.Com.Au Hardcore
Join Date: Jul 2008
Location: Parkdale, Vic
Posts: 1,016
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Yes, you will get re-imbursed all unused funds at the end of the lease.
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"You can't fight stupid people - there's just too many of them" |
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#3 | ||
Banana
Join Date: Sep 2005
Location: Wandin North, VIC
Posts: 2,031
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As above, but any unused pre-tax money left over at the end of the lease will be returned to you less the normal taxes payable on that amount.
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2024 Ford Ranger Wildtrak V6 w/PP 2012 WK2 Jeep Grand Cherokee Overland CRD |
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#4 | |||
Regular Member
Join Date: Jun 2010
Location: Old Sydney Town
Posts: 440
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Quote:
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#5 | |||
GT
Join Date: Apr 2005
Location: SYDNEY
Posts: 9,205
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Quote:
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#6 | ||
HiLux SR5 & 68 XT ute
Join Date: Sep 2005
Posts: 89
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i just sold my hilux - 3 year lease - purchase price of $45k. 15kms a year . this year i missed kms by over 3000kms - FBT smashed me by almost $4k! residual payment was $21k. Sold the hilux for $45k! thank you very much! i had $8.5k in my kitty of un-used funds....i "broke my hard lid and got a new one - canopy) which left me with a touch under $6k... i sold my car first of may and still have not seen this money, but still had to pay the full amount of $21k for payout.... the $6k extra gets refunded at the highest tax point so im expecting about $3k back. Although i hated the lease to do the kms (i also have a work car) not having a lease vehicle now gives me an extra $85 bucks a week! on my wage it was well worth it. Misses CX7 is going on lease next week - Any extra funds will be completely used up from now on, fricken tax man gets you every time!!!!
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XT ute build in progress! |
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#7 | ||
Black 2006 XR8
Join Date: Dec 2010
Location: SA
Posts: 177
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I have had a couple of novated leases and yes you get the cash back eventually but you are much better off making a realistic estimate of fuel, tyres etc and reduce your fortnightly payments. I would prefer to have my surplus cash in my offset account or savings account rather than the account of my lease company.
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#8 | ||
FF.Com.Au Hardcore
Join Date: Jun 2008
Posts: 1,137
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I used to keep a surplus but now prefer to keep slightly in the negative. Let the lease company hold some of my costs.
That said come the end of this year it will be my last lease, just not worth it with the recent changes. |
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#9 | ||
Regular Member
Join Date: May 2010
Posts: 316
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Keeping in mind it's fradulent..... but a way you can avoid paying some tax is just prior to selling the ccar cancel your insurance policy, get a payout from the leftover premium, start and pay for a whole new policy on your account then when the car is sold get the premimum paid out to you again. The fee's charged by the insurance company are negligable in comparision to the tax paid.
Also, if your keeping the car at the conclusion of a lease - with any leftover make sure you buy a set of tyres, 10l of oil, brake pads etc. and keep 'em in the shed for when you need to replace them. Again, technically fradulent in the eyes of the tax office, but means the items come out of pre-tax money. |
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#10 | |||
FF.Com.Au Hardcore
Join Date: Apr 2007
Location: Miranda, NSW
Posts: 6,771
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Quote:
How we operate for ourstaff, if there are any surpluses to be paid we pay it at the "employees" top marginal tax rate as that's what would be deducted if it were paid in cash without novated leasing - so if they earn under 180k then 37% + medicare levy comes off. If they take top marginal (46%) then it will be adjusted when you lodge your tax return
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2005 BA MK2 FPV GT - 6 SPEED MANUAL , SILHOUETTE, SWISSVAX, SUNROOF, BILSTEIN AND LOVELLS, FACTORY GENUINE 19'S, X-FORCE STAINLESS QUAD CATBACK, ADVANCE HEADERS, 200 CPSI CATS, BLUEPOWER CAI, HERROD BREATHER KIT, 4:11 DIFF RATIO, MAL WOOD OPT 3+ CLUTCH, BILLET SHIFTER, MELLINGS 10227, NOW WITH REVERSE CAMERA/SENSORS, ALPINE SPEAKERS & SUB - CUSTOM TUNED TO 275 RWKW NOW WITH A NEW ADDITION - 2017 MUSTANG V8 GT FASTBACK - , 6 SPEED AUTO IN PLATINUM WHITE, |
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#11 | ||
Regular Member
Join Date: Sep 2009
Posts: 123
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I bought the hard cover for my ute with some of the excess money I paid, also went on some high kilometre holidays, & had some extra services done - auto & aircon. As I paid out the lease & kept the ute it was worth it. The pre tax payments meant I kept taxable income low & didn't pay the extra medicare
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His: : BA RTV V8 Lightning Strike LILP Gas :FG XR6 Kinetic Eco-LPI, Hers: Titanium Territory, Smoke |
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#12 | ||
Silky Smoothe
Join Date: Mar 2011
Location: Hampton Park, Melbourne.
Posts: 412
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Alright, so instead of running a whole new thread. Hopefully i can just find out through this one.
my company have offered me the possibility of a Novated Lease. Now i'm only 20, so not sure on how exactly this lease thing works, Hopefully someone can share some light on this for me. I earn just shy of $1000 a week before tax, looking at a FG XR6T at the moment, that should cost me about $40,000 brand new. Is it possible to go second hand cars? what are the actual costs involved? what do i loose weekly/annually? what are the benefits (if any) to Novated Leases? |
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#13 | |||
GT
Join Date: Apr 2005
Location: SYDNEY
Posts: 9,205
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Quote:
i cant answer all the questions , just the ones i know . it is possible to go 2nd hand , bare in mind GST is exempt . so if you buy a 40k car your price will be 36k this is the same if you buy 2nd hand from a dealer , as cars are subject to GST . if you buy private there is no GST savings . ( keep this in mind ) also , if the lease company buys the car for you and supplies it , the interest rate may be a little lower than if you buy yourslef , so if you buy yourself , make sure you can beat the lease companies quote . you will lose money which will be going towards paying for a car ( people forget they have to pay for the whole car , but what you save leasing , you cant match if you were to buy one privately . the benifits are many , you dont have to work on the car at all , you can pay $2 p/wk , and insure yourself for car off raod , so if you have a smash , another car is included for you to drive , while the car is off the road , you can insure a gap incase of redundancy the catch is : if you are sacked , you take the car and pay out the lease outright , which will cost a lot more than 40K , more like 50K in the 1st year . food for thought , i dont think you earn enough for it to benifit you . but i'm not sure . just an added bit , 20 year old with FG TURBO !!!! YOUR CRAZY , YOU'LL BE WORKING FOR THE CAR , AND YOU WILL LOSE YOUR LICENCE . BAD MOVE !!!! |
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#14 | ||
FF.Com.Au Hardcore
Join Date: Apr 2007
Location: Miranda, NSW
Posts: 6,771
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The benefit of salary packaging arises when you get more net income (after tax income in other words) from having your employer pay the car lease and running costs compared to you paying for them yourself in after tax dollars after taking into account FBT charge the employer will most probably charge back to you.
The benefits are greater the more you earn, so if you're on the top marginal tax rate, you pay 46.5% on anything you earn over $180k a year. I personally don't think in your situation it would be worth it. I just did some quick sums Your lease cost would be around $900 a month with a 4 year lease and 40% residual - $8,300 p.a. The running costs, insurance and rego and servicing I estimated at $7,700. The FBT will be a flat 20% of the cars base value ($40,000) and works out to be around $7,000 p.a. Those 3 things sum up to $24,000, and is the amount you will need to sacrifice, before getting into the intracacies of peronal contributions etc - so you lose nearly half your gross income because of a desire to own a XR6T! By having those things paid out of before tax income you'd certainly pay less tax , but that saving would only be 30% on the first $13,000 and only 15% on the balance, so a total tax saving of $5,500 compared to $12,000 for someone on the top tax rate. The FBT is a flat rate of 45% calculated as 40,000 x 20% 1.98 x 0.45 = $7,128 as I said above I don't think its worth it
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2005 BA MK2 FPV GT - 6 SPEED MANUAL , SILHOUETTE, SWISSVAX, SUNROOF, BILSTEIN AND LOVELLS, FACTORY GENUINE 19'S, X-FORCE STAINLESS QUAD CATBACK, ADVANCE HEADERS, 200 CPSI CATS, BLUEPOWER CAI, HERROD BREATHER KIT, 4:11 DIFF RATIO, MAL WOOD OPT 3+ CLUTCH, BILLET SHIFTER, MELLINGS 10227, NOW WITH REVERSE CAMERA/SENSORS, ALPINE SPEAKERS & SUB - CUSTOM TUNED TO 275 RWKW NOW WITH A NEW ADDITION - 2017 MUSTANG V8 GT FASTBACK - , 6 SPEED AUTO IN PLATINUM WHITE, |
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#15 | |||
Marko
Join Date: Sep 2007
Location: Perth W.A
Posts: 430
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Quote:
That is even if they let you as a T6 would probably attract higher repayments on any finance attached to the lease still needs you to demostrate a)you can afford it and b)the risk to them is minimal. If your employer and the lease company let you by a T6 they also need shooting.From experience with friends and family if you cant make money with the vehicle. i.e. ute or wagon used for work don't bother. Finally one thing many people forget is if you lost your job you are still stuck with the car, the employer bears no responsibility at all. If you go to a new employer they do not have to accept the Novated lease as part of your employment contract. Repayment terms are genereally high in these situations compared to a normal car loan. If you get into difficulty you either have to unload the car at a huge loss or take on the payments out of your net income.
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Mark |
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