Find me the lowest interest rate for a Novated Lease

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  Shadowsfury on 06/05/2014 - 10:29

  My novated lease is with nlc and the interest rate is 7.95%.

  • 

    megadeth on 07/05/2014 - 17:19

    I was charged 14.5 percent with them for my novated lease during 2010-2013 with NLC. May be with the new mileage rules their interest rates have come down a bit with not many novations. I had a loan of $2 4.5k and a 4year term.

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  2ndeffort on 06/05/2014 - 11:17

  I think they fix the interest rate when you sign up for the lease. I used a broker a couple of years ago who found me a great deal, massively upset McMillan Shakespeare at the time as I was the only person in the large multinational that I worked for who had exercised the right in the agreement we had to source my own finance. I was massively escalated past the handler and onto senior management there when I stepped outside of the regular 'leave it all to us' mantra.

  I also sourced the car myself, actually bought it from the same dealer that McMillan use but I managed to get a better price than they quoted. I easily found better insurance options for all 3 of the insurances they offer. (Note here I have in the past been tempted to skip the redundancy insurance, after being made redundant a couple of years ago I highly recommend its worth as it paid my car lease for 6 months.)

  After setting it all up I spent the next 6 months acting as a help desk as I had calls from all over the company asking me for advice on getting past the outrageous finance rates McMillan were sourcing via their owners, Maquarie. I honestly think that most novated lease companies work by ripping you off under the banner of 'convenience'.

  • 

    [Deactivated] on 06/05/2014 - 16:27

    Thanks, I have shot an email off to NLC asking if I can seek an alternative financier…I also mentioned to NLC that I got a quote for the same car and it was $500 less without even haggling…

    Convenience costs money…

    • 

      mini2 on 06/05/2014 - 23:18

      I'd be surprised if they let you. In the past I've asked the question and got told GTFO. Similar response when I suggested an associate lease. Both of these arrangements meant they can't arbitrage between the cost of MacBank supplying them the loan and what's being charged to us.

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  dy4me on 06/05/2014 - 14:43

  +1

  Correct me if im wrong but NLC would let you get your own finance. my lease ends in 10 days and will be moving onto a new used car. but they will organize the loan for you. The interest rate is determined by the amount borrowed, the length of the lease and market interest rates. Longer leases and higher amounts attract lower rates generally.

  • 

    [Deactivated] on 06/05/2014 - 15:06

    Can you tell me what the rate was for you?

    I had 2 quotes…

    A $72k (inc GST) car, 36 mths on a $67k (ex GST) loan, with a residual of $33k (inc GST) 20,000kms/yr - was told the interest rate was 9.42%

    A $55k (inc GST) car, 36 mths on a $50k (ex GST) loan, with a residual of $24.7k (inc GST)20,000kms/yr - was told the interest rate was 9.76%

    I know their financier is Macquarie…but a friend of mine bought his on finance (without a novated lease) via Macquarie and his rate was 5.75%……

    So somewhere in the equation, there's a minimum of a 3.5% mark up in the finance interest rate!!! That's a lot of convenience to forfeit as a consumer…

    • 

      dy4me on 06/05/2014 - 18:26

      I think my rate was 13% something for a 19k Loan. But thats because I only take one yr terms. that way i pay of quicker.

      Yes I know that if you go to Macquarie Bank directly you will get a cheaper loan. My theory is that although NLC's fees are very low thats where they make their money. That difference most possibly goes to NLC. I tried to think if there are any ways around it but i dont thin there is. If it wasnt for the novated lease benefits i wouldn't go throug NLC.

      • 

        mini2 on 06/05/2014 - 23:13

        Did the same thing as you and I think during my last 1 year renewal (16k left on it or something) and it was somewhere over 18%. It's ridiculous.

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  [Deactivated] on 07/05/2014 - 07:23

  Hmm…Looks like there's quite a few of us being snookered into a high interest rate…I am still interested to hear from those (especially OzB members who work for a novated lease company) that have gotten an extremely competitive finance deal on their novated lease.

  Thanks in advance.

  • 

    wildcres on 07/05/2014 - 09:59

    I wouldn't exactly say snookered into a higher interest rate, the interest rate is worked off a number of variables as dy4me as mentioned.

    Interest rates can also vary depending on whats been agreed with the bank and an employer

    Your best to shop around if you 'want the best deal' and then decide based off your quotes which one suits your needs and you are happy with.

    I work for a leasing company (not in the sales team :) and my interest rate is cheaper but that's a staff benefit.

    If you actually want the best deal then join a leasing company :)

    Regards,
    Andrew

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  [Deactivated] on 08/05/2014 - 13:12

  Got a call back from the NLC rep…They have reduced the rate down to 9.15% and 9.2X% (best they could do)…and said that the rate is pre-tax and going novated would still be the cheapest option…I asked for a comparison as follows:

  1. taking money out of home loan, at say 5% interest rate
  2. paying cash for it (like I got this money lying around…)
  3. novated lease

  Based on the above, the novated lease is "cheaper"…BUT wait…there's more…the actual saving per annum over a 3 year period between Option 1 and 3 is like $1400/annum…not the so claimed $5k/annum as per their comparison calculator…

  So…$1400/annum…it's a saving…but when u weigh up the risk/reward factor…it's not a saving…why? well, if you read the fine print…if you terminate the lease during the term, you have to cough up the full payment + 3 mths equivalent payments as a penalty…(Redundancy cover is a separate topic altogether)…

  How do novated lease companies get away with this???

  I think the Whirlpool forum mentioned Zenra offering a better rate..I might try them.

  And for those looking a Toyota…I think Toyota Fleet is offering 5.75% on camry's and aurions…

  • 

    wildcres on 08/05/2014 - 14:12

    All things come with a fine print

    If your unable to pay then talking to the leasing company a payment plan can be put in place, otherwise if you change to an employer who offers leasing to its employees they could take over the lease for you.

    • 

      wildcres on 08/05/2014 - 15:44

      Actually just to clear this up you are entering into an agreement, no payment plan is offered. You have to come up with the payout figure should you have to terminate early.

  • 

    mini2 on 08/05/2014 - 21:03

    Let's have an option 4 - Medfin/Investec do 5.4-5.6% but restricted to certain professions. Or call some of the brokers around, Alphera might be able to stretch to low 6's and there's no break fee if you happen to terminate early.

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    dy4me on 12/05/2014 - 10:15

    @Siu_loong_bao? So your able to negotiate the rate down? I didnt think it was negotiable!

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  cisco on 18/10/2016 - 18:37

  To those who choose novated leasing did you find a better deal? If so mind to share the tips and tricks?
  Is that correct that you can go through NLC or sgfleet and use your own lender?

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  Safoan on 25/08/2017 - 00:19

  I just signed up for 1 year noveted lease through Street fleet and it looked good at the beginning but now when I finally got the full picture it looks like that Street fleet is ripping me and taking almost all of my tax savings with very high charges and fees plus interested. This is the breakdown they provided for a 2009 golf

  The breakdown is a s follows

  Vehicle Cost $8683.99

  Loan Fees $1350.00

  Street Fleet Fee S 344.87

  Monthly fee $ 7.95

  Base Rate 10.50%

  Interest Payable $ 1484.14

  Amount Financed $ $ 10378.86