What Are the Top Benefits of Novated Car Lease: should you opt for it?

When it comes to buying a car, buyers have different kinds of options for purchasing the vehicle. The first option is buying with cash. That is what rich people do. Not all people have a lot of money to buy cars, and thus they look for bank loans. If banks loan is not available to them due to low credit rating, they generally go for a private lender. Private lenders are good as they offer loans without any hassles of credit rating analysis. However, they lend money at a high rate of interest. So, repayment of such a loan would be a little difficult thing.

Apart from the loans, there is another possibility to purchase a car, and that is acquiring it through a novated lease. Now, this is quite a lesser known option, but it is highly beneficial. Novated lease involves your employer in the process of car buying agreement. The premium for the car lease is paid before disbursing salary to your account by your employer. For this process, you need to learn about the potential benefits of the leasing. So, here are the benefits of novated lease for purchasing the car.

1. Saving Your Money from Taxing

Since you have to pay the lease premium before your salary has been taxed, you can protect some of your money from being taxed. In case of a car loan, you have to pay the premium from your salary account. The salary is taxed at first, and then you pay the premium. In a way, you are also spending some taxes on the car loan repayment premium. You can save a small amount of money, and such a saving is always welcome irrespective of the amount. In fact, when you purchase a luxury car with high lease premiums, you can save a lot of money at the end of the lease tenure.

2. Simple Agreement Process

The process of creating novated lease agreement is simple. It involves minimal hassles, and that is why this type of car buying process is popular.  The car seller makes a deal where you will be the buyer. But, the agreement should also involve your employer who agrees to pay the lease premium on a monthly basis from your salary before disbursing the salary to your account. To calculate the premium value, one can use a novated lease calculator.

3. Suitable for People with Low Credit Score

If your credit score is low or you have opted for some loans already, you may not get a loan for purchasing a car. In such scenario, it is better to go for novated lease than choosing a private lender who shall agree to lend you money at a high rate of interest. In the case of a novated lease, the credit score will not matter, and you shall be able to purchase a car successfully.

4. Lease Contract Flexibility

Generally, the rent is for a fixed period. The time could be typically two to three years. However, it could be even more than that. It is yet another advantage of choosing a novated lease.