How do I choose a Novated Lease Company?
By Novated Lease Blog on Aug 10, 2010 with Comments 7
How do I choose a Novated Lease Company?
Decided to do a Novated Lease but now you are not sure which Novated Lease company to use?
Here are some tips to help you make an informative decision:
Finance/ Lease interest rate
This is easy to compare, look at the finance payable monthly to see which company is offering you the best deal.
Novated Lease Tip When comparing monthly amounts, make sure you are using either the exclusive GST amount or an inclusive GST amount. If you dont distinguish between these amounts from the start, you will not be comparing apples with apples. ie. Novated Lease Company “A” quotes you a monthly lease payment of $800 excluding GST and Novated Lease Company “B” quotes you a monthly lease payment of $820 including GST. When you are on the phone to a smooth talking salesperson, you may think “A” is a better deal but in fact “A” = $880 inc GST and “B” = $820 inc GST.
Fuel Card
Ask, who is the fuel card provider and where is it accepted? The best advice I can give on this is dont settle for a fuel card that you can only use at one fuel provider. ie BP or Caltex or Shell. Go with a Novated Lease Company that has a multi fuel card, that way you will never have to hunt around for that one fuel station that you have to use. Examples of a multi fuel card are Fleet card, Motor Pass and Aussie VIP Card.
Servicing
The biggest Novated Lease Tip here is to make sure you have options. Make sure you can either use the Novated Lease Companies suppliers or have the choice to choose where you take your car for a service or maintenance.
Monthly Fees
These can be labeled in many different forms, admin fees, management fees, fuel card fees, fbt reporting fees. No matter the fee, add them all up to get a total and use this figure to compare each Novated Lease Company you receive a quote from. Novated Lease Tip In todays market, total fees range between $30 and $90, a big variation so choose wisely and ask “what are you getting for your buck!”
Insurance
Are you covered if you lose your job? Lease protection can be included from the start, this may protect you from involuntary redundancy. Read the PDS to make sure the product suits your needs and requirements.
Budgets
Make sure the Novated Lease Company has budgeted enough for fuel, maintenance, insurance, rego etc. At the end of the day if any of these budgets are light based on your vehicle requirements, its you who will have to pay extra.
When all else fails
Novated Lease Tip Compare the overall cost of the entire package, again either the ex GST amount or the inc GST amount.
Need further help
Send me a question by leaving a comment and I’ll do my best to provide you some Novated Lease advice and answers.
Filed Under: Featured • Novated Lease • Novated Lease Deals • Novated Lease Explained
Hi do you know if you need to view a PDS if you sign up to a Novated Lease. You do for the insurance side but what about the salary packaging and budgeting sides?
No there is no PDS for a novated lease. But most companies make you sign a schedule before going ahead.
Some companies will ask you to sign an agreement stating that you allow them to deduct money from your pay and that you agree with the budgets in place.
There are a few novated leasing companies that will charge you to change your budget schedule; others that say you cannot change your budget schedule (what they have put in place is IT, full stop).
I’ve even heard of a company that charges $25 for more than 4 reimbursements a year!! So, if you get your rego; insurance; car washes; fuel and one-off’s like the excess paid to your insurance in the event of an accident and you’ve used up your 4 reimbursements a year, watch out!
Some companies will also charge a ‘termination’ fee if you decide to leave them – lets say you move to another employer and they don’t deal with ‘XYZ’ Novated Leasing Company, they have another one in place. (your lease is now called an Orphan Lease) You ring up your existing novated leasing company, ‘XYZ’, and tell them you have to move to another and they charge you to leave them. . .which would be ok if it was a set fee and you knew that upfront. I know of one company that will charge you whatever is in your account with them at the time of leaving!! One person I know had over $6K in his account (because they over-estimated on his budget & he was 3yrs into the 5yr loan) – when he advised them he was going to cancel his account with them, they told him his cancelation ‘fee’ was exactly what was in his account. . .
My advice is make sure the company you use allows you to regularly make changed to your account IF required and that they don’t have any hidden clauses like the above scenario.
Hi,
I have an existing Novated Lease, and have been made redundant.
The most viable options are a.) to take over the lease myself, or b.) find another company to work for, and have the lease re-novated through them.
I may get a new job with a relatively small company, who are very willing to assist, but don’t have any arrangements with curent leasing companies – my current leasing company require a fleet size of at leat 20 vehicle, so they’re out…. What they have offered, though is an arrangement whereby they can work together with another leasing company and merely act as the finance company, but the actual salary sacrifice would be done through this other leasing company.
Therefore, what I am currently looking for is a “One-Off Leasing Provider” that the company that I may be working for can approach. Any idea where/how I find a good One-Off Leasing Provider, and do you have any other comments to my current situation?
Krgds
Per
Per most of the major novated leasing companies do have restrictions on fleet size. I work for a company that has re novated several leases for smaller fleets. Were happy to do it because we hope next time you will re novate through us or even refer people to us.
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Im looking at a fully maintained novated lease. The FBT is included in my monthly payments. If I spend additional money to maintain the car. like getting the car washed regularly, would I normally just send the receipts to the novation company and be refunded the full amount from the FBT component I’m paying.