Has anyone done this before?
Yes it covers everything. Its one of the benefits(salary packaging/lease) that the company i work has on offer. Spoken to a few boys at work who are doing it and they seem happy with it.you could easily use $400 in fuel in a month ... are you sure its covering everything ??
Its a lease!!Is it a lease or HP??
They are different
Yip its a novated lease. I might have another chat with the consultant. I gave a rough estimate of about 10K kms a year. Last year i only did 3K but now i do a bit more travelling to work.Also there are different types of Leases.
Personal Lease - Fully Maintained Novated Lease - Self Maintained Lease - Operating Lease .
I was a Leasing Consultant for the past 2 years for McMillan Shakespeare which is the Company responisble for Personal Novated Leases and also Operating leases for many companies and organisations in Australia such as Southern Health, NSW Police, WA Police, NSW Fire Brigade, Rail Corp, St Vincent's Hospital, Toshiba Australia, Kellog Brown & Root Company etc....
From experience, doing a Novated Lease (Using a portion of your Pre-Tax dollars) is only fiancially viable if:
1. You choose a Lease term for which you know that you are willing to have the same vehicle for that length of time. (As stated above, it's not easy to exit a lease before the Tenure end date)
2. The more Annual Kilomtres you drive, the lower your Fringe Benefits tax will be meaning the more Tax dollars you can save. However the more you Kilometres you drive also means the lower the value of your vehicle at the end of your Lease term.
3. It's much more viable and better of if you're in the higher Tax bracket from $80k+ (Paying a lot more tax)
4. Never expect to get a lot of cash back when you sell your vehicle at the end of your lease term, as you will have a residual percentage owing at the end of the lease therefore you need to keep in mind is the estimated re-sale value of the vehicle when the Lease term is up + the estimated Odometer reading on the vehicle when the Lease term is up..
Last but not least, be careful with the figures you are provided:
Rodsfromday: You said $900 per month right?
That's $10,800 Annually.
That's $54,000 Over the length of the Lease.
Plus your residual of $8,000.
Total $62,000 payable for the costs of a $35,000 Vehicle.
$62,000 - $35,000 + Interest rates etc.. = $27,000 approx for running costs.
The big question for you now is, do you really think you'll be spending $20,000 - $27,000 on running costs/expenses for this particular vehicle ?
Oh and when you get figures, try and get them itemised so you know exactly how much is going towards the vehicle payments so that you can calculate what the interest rates are. A lot of Leasing companies out there try to be discreet regarding interest rates (believe it or not) The amount of car's and leases I used to organised without ahving to verbally explain the interest rates is unimaginable. (Of course interest rates are all within the contract that they sign though)
Not with a lease..Looking at the full cost of lease ....purchase price+interest+running costs is not really fair. No matter how you bought the car or what you paid for it you will always have running costs.
But, I agree it does add up to a lot of money. From what I understand, leasing really becomes viable if you are in a very high tax bracket (45%)
Can you also claim depreciation on the car?