I'm interested to hear the thoughts or experiences of the community.
I have Mazda3 that I own outright, however I have the opportunity to do a sale and leaseback through maxxia. This would seem to make sense in this case primarily because the depreciation will be less on an older car vs a newer car, while it seems the ATO depreciation schedule does not differentiate between the two. Has anyone done this?
why would you want to pay interest on a lease if you own it outright? Do you need the cash for something?
I'm assuming the tax savings on running costs would outweigh the small loan's interest payments…
Interest and management fees are generally very high and hidden. All you can do is get a quote and see what it looks like.
I'll be doing this soon actually, huge benefits.
You know the car inside and out, and is a far more reliable purchase than any other 2nd hand vehicle.
Another point is that servicing costs increase as a car gets older, and the good thing is those service costs are incorporated into the lease along with other usual running costs. That alone is a lot of GST savings.
People get hung up with novated leases on new cars only, but there's absolutely no reason why a used car can't be done as well… especially a car you know 100% on.
Funds raised can then be put onto otherwise non tax deductible amounts (like credit cards, personal loans, or house loans), which benefit your after tax cash flow directly.
You may want to explore the option of Associate Lease, which might be better if you already owned the car outright.
Yes did this on a 2002 Corolla we owned.
In 2005, Got $15,000 from the lease company on a novated lease on a 3 year term.
3 years later traded it on a Pajero in 2008 and got $13,500 and the lease payout was only $8,000.
I thought it worked out pretty well.
That was 9 years ago and times are a bit different now.
While a used car doesn't make any difference to the calculations per se you need to consider if a novated lease makes sense at all. These days they only seem to make sense compared to a dealer car loan and the biggest saving seems to come from new car GST and from their buying power on the car itself.