Novated Lease underspends. What to do?

temporiser on 05/03/2023 - 12:54
Last edited 05/03/2023 - 12:54

I have underspent by $4k on my Novated vehicle lease mainly because I have only done 5,000 kms this year. All my major expenses which I incur in September have been reimbursed, such as Insurance, Registration and Tyres.

I’m overdue for a service which will be completed mid-March.

I have just asked my employer not to make any more salary deductions for the month of March.

Does anyone have any ideas on how else in can reduce this this underspend in the next three weeks so I don’t have this underspend treated as salary and hence taxed at the top marginal rate?

Automotive

Comments

  • skullster704 on 05/03/2023 - 12:58

    Kind of vehicle?
    Suggestions for tow bars, roof bars etc might not be useful if your vehicle is an i20 or similar

    • Matt P on 24/03/2023 - 22:52

      You can't package the cost of capital improvements. Only repair and maintenance

  • avoidfullprice on 05/03/2023 - 13:00
    +2

    I have just asked my employer not to make any more salary deductions for the month of March.

    This wont do anything as your financial year income will be the same. Also check your lease conditions. You might be breaking them and attract fees unintentionally.

  • MS Paint on 05/03/2023 - 13:12
    +1

    Just save the credit for the end of your lease and put it towards your payout (assuming you are buying the vehicle).

    You will still have to pay tax but look at it as forced savings.

  • FoxJump on 05/03/2023 - 13:13

    makes no difference, it gets paid back to you on the payrun after the end of the novated lease.

    you could … possibly take a new insurance policy, cancel the current, and reimburse again. maybe

    • MS Paint on 05/03/2023 - 13:14

      take a new insurance policy, cancel the current, and reimburse again. maybe

      I'm guessing this would be seen as defrauding the federal government.

      • FoxJump on 05/03/2023 - 13:25

        if he reports the insurance refund as income at the end of the year then i think he should be just okay

        (i am not a tax agent not a financial advisor)

  • nedski on 05/03/2023 - 14:21
    +1

    Get the car detailed?

    • [Deactivated] on 05/03/2023 - 15:24

      can this be done pre-tax via service & maintenance? i.e. tinting, ceramic coating, dashcams

      • Matt P on 24/03/2023 - 22:53

        Detailing/cleaning yes. Additions of things the car didn't have before no. This includes ceramic coating

  • lylesbargain on 05/03/2023 - 15:22

    Get someone you know who drives a lot, do extra driving for you. Probably something that should’ve been looked/thought about before taking out the lease.

  • JIMB0 on 05/03/2023 - 15:23

    Drive for uber.

    • [Deactivated] on 05/03/2023 - 15:26

      i don't think you can use novated lease vehicle as an Uber

      • Matt P on 24/03/2023 - 22:53

        Absolutely you can. Have done it myself. You just can't claim the vehicle expenses a second time (fuel, depreciation etc..)

  • AustriaBargain on 05/03/2023 - 15:26
    +2

    Can you get fuel cards? My old housemate was given hundreds of dollars a month in fuel cards by his wealthy parents and he used them all for cigarettes. So can you take up smoking?

    • donamique on 22/03/2023 - 16:13

      You can use fuel cards for other things than fuel?

      • AustriaBargain on 22/03/2023 - 16:27

        My old housemate did. He needn't have nickel and dimed his parents so much; his father died not long after and he inherited his share of a medical centre worth tens of millions.

      • Matt P on 24/03/2023 - 22:54

        Its possible but the ones a novated leasing company will issue will be locked down to fuel, oil and carwash only

  • thatonethere on 05/03/2023 - 16:59

    You should be able to return the money back to you - however some tax will be applied?

  • seannami on 23/03/2023 - 16:48

    Does your NVL company recalculate yearly based on driving amount (if you're on more than a year)? That way if they negotiate running costs down you have some wiggle room for more running costs next year. Otherwise it all comes back in payroll at the end, and stopping deduction in March would have the same effect on taxable income.

  • Matt P on 24/03/2023 - 23:04
    +1

    If you really don't want the money back via your pay, the following are things you could do
    - repair any damage (dings, scratches, guttered alloy wheels) and expense the repairs
    - car wash/detailing. Adding a ceramic coating will be considered an addition and capital additions can't be packaged so be careful here

    If you were the kind of person who does their own maintenance, you could pick up some oil, an oil filter etc.. for some additional maintenance (most manufacturers have fine print in service manuals recommending more frequent oil changes in "extreme" conditions such as hot weather, dust, etc.. so you could have an argument that you're following the manufacturers direction)

    Not much else you could do beyond the above which doesn't start to land you in the territory where the leasing company could challenge the claims.

    Source: worked in novated for 8 years (7 years ago)

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