Novated leasing is supposed to be a kind of vehicle lease where in you own the car under an agreement that seems to have a balloon payment referred to as the residual value that is actually a lump sum payment when the lease term comes to an end. In comparison to buying a vehicle using consumer finance loans that typically involves the two main parties, the buyer and the seller, a novated lease is supposed to be an agreement between three parties, your employer, you and some third-party financier.
What Kinds of Vehicles Could Be Used In Case Of A Novated Lease?
There are absolutely no existing restrictions while you choose a car that caters to your preferences. All cars could be bought and you could even use a car that you are actually, using and paying off presently. You could use both new, as well as, old vehicles. It also applies to different categories. There are more than cars available out in the market; you will find great van deals as well. If interested, you can check for more kombi van deals.
What Would Happen If I Am Terminated from My Job?
If your services are terminated, you could carry forward your novated lease to your next employer and continue making all the repayments to the financier directly. You may even terminate the novated vehicle lease early or even consider paying it out. It is totally up to you what you would like to do with the lease if you lose your current job.
How Long Would Novated Leases Usually Take To Establish?
This would be depending entirely on the financier you are using even though, it takes around a couple of weeks to just a month.
How to Pay Out the Car?
If your finances are in good condition, at the end of the term, you could definitely pay out whatever amount is left and buy the car. You could own the car forever if that is what you want. All you require doing is contacting your novated lease company and they would be giving you an accurate payout figure. After the settlement of all the dues, the car becomes yours. You must understand that you won’t be able to buy the car outright using pre-tax funds. In this context, whenever, you are seeking car leasing – Novated lease is your best option.
At the End of the Lease Term, Should the Same Car Be Refinanced?
The first instinct many consumers have is to hold on to their car and re-lease the residual once the Novated Lease period is up. And this makes sense on the surface because you would save a lot of hassle involved in trading or selling your current car for a new one if you just re-leased it. Cars manufactured in this day and age are super reliable and are unlikely to be out of shape or worse for wear after a single lease period. You might want to consider some things before making this big decision, though.
Reliability is hard to measure and even though a car is working fine presently, there is no way to gauge whether it will be running into trouble along the way. Servicing is very expensive as well, and data suggests that the vast majority of cars that are more than four years old have serious mechanical issues. You will have to get your car inspected by an expert to understand if you are actually getting the better end of the deal by reducing repayment on re-leasing, or might end up paying hefty maintenance costs in the long run.
Is a Novated Lease Provider Supposed to Give You a Quote without even Learning about You?
Instant quotes are really great but never at the cost of losing out on a much better deal and even more in terms of potential tax savings. A good novated car leasing company would find out every detail about your financial health and then offer the best possible deal under the circumstances.
Conclusion
Do not be afraid to ask questions and be sure to compare quotes if you wish to make the right choice. Your novated lease and your vehicle would be with you many more years so it is best to go about it in a systematic and a proper manner right from the very start.
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