What's your thoughts on using salary sacrifice for fleet? We are looking at getting a Nissan Xtrail. We prefer to have the cash sitting in our offset mortgage account
Salary Sacrifice for Fleet?
baybeejuice on 05/11/2017 - 22:32
Last edited 05/11/2017 - 22:33 by 1 other user
Last edited 05/11/2017 - 22:33 by 1 other user
Comments
My accountant did the math for me and buying outright (by withdrawing from the mortgage) was a few hundred a year better for a novated lease.
My concerns were at the end of the lease you'll have a big balloon payment that can be dependent on the condition of the car. If the lease company can't sell it for the balloon payment they'll bill you the difference. Alternatively, if you can sell the car for more than the balloon, then you pocket the difference.
No doubt they'll send you spreadsheet calc showing how much better off you'll be but you really only "save" money because you're getting a tax refund each year. You could achieve the same outcome by salary sacrificing to your super, and all things being equal, you'll have something to show for it.
It might be worthwhile if you get a very good price via their bulk purchasing (assuming the lease company passes all the savings to you), pay no GST on that price, and are not paying OTT for the running costs of the vehicle (tyres, insurance etc). If you're paying cash for the vehicle you'll be in a strong negotiating position with the dealer and you can shop around for running costs and you won't have a monthly admin fee either.
It is definitely worth it if you're on big bucks and included to spend big bucks on a car anyway but it can be worth it for others, depending on your circumstances, so do heaps of research and get quotes from various companies. I found a guy called John Cadogan particularly informative on the subject. He's very biased against the car dealers and some manufacturers and paints himself as a consumer advocate.
He's very biased against the car dealers and some manufacturers and paints himself as a consumer advocate.
Agreed, he definitely has bias, as does any reviewer
Comes down to your personal circumstances. Does the lease move you down a tax bracket? Are you planning to move/change jobs during the lease period? Do you want to keep the car at the end of the lease or get another one?
Just remember you are still paying for a car loan in a salary sacrifice even though you are taxed less
You need to do the maths