Novated Lease vs Dealer Finance vs Bank

Ljaesoonee on 12/01/2024 - 16:17
Last edited 15/01/2024 - 08:52

Hi all,

Seeking your collective advice on my current situation.

Have been on the waiting list for a Lexus NX350H since 2022, got affected by the chip shortages and have been finally notified its due to arrive in March so looking at the best option if we exclude a full cash payment. Upgrading due to the kid getting too big for the sedan with a baby seat

$160K salary exc super, $40k in savings, Will sell/trade in current car (2017 Audi A3). $15k yearly contributions to super for FHSS via salary sacrifice, no HECS
Estimated 8k-10k km driving a year.

Employer is partnered with Maxxia as their Novated Leasing option and has provided the following quotes.

Total Amount Financed: $87,412.27
9.29% Interest Rate with Macquarie
Removed all insurance options (Lease Protection, Guaranteed Buy Back, Extended Warranty, Total Loss Assist)
Running costs are set to $72.73 (Fuel), $90.83 (Rego), $113.64 (Comprehensive insurance) per month

Other bits noted in the quote (all monthly):
Novated leasing fee: $5.91
GST on ECM: $125.84
Luxury car depreciation allowance: $75.60

1 Year with NL
Residual Value: $58,635.611
Pre-tax deduction/per month: $2,012.92
Post-tax deduction/per month: $1,384.24

3 Year with NL
Residual Value: $41,883.85
Pre-tax deduction/per month: $773.50
Post-tax deduction/per month: $1,384.24

Other options being considered with longer terms (less hassle if changing employers) are;

  • Trade-in Audi with Lexus as deposit and finance via dealer direct the remainder with balloon or no balloon via fixed rate loan. (Removes trouble of balancing no car until the new one arrives).

Balloon: $880/mth ($25k deposit @ 8.7% over 4 years)
No Balloon: $1,750 ($25k deposit @ 8.95% over 4 years)
* Car loan via bank
$2,152.94 (assuming $20k deposit @ 8.49% over 3 years)

Is a novated lease option still better off given the onroad/running costs and some principal payments would be covered pre-tax?
Keen to get your personal experiences, tips and recommendations.

Cheers!

Automotive Novated Lease

Comments

  • FoxJump on 12/01/2024 - 16:42
    +5
    • Are there any calculations to work out the actual amount being paid to principal vs add on interest the provider is tacking on?
      => Yes, any balloon repayment calculators on the internet

    2) remove comprehensive insurance, get your own. Confirm Maxxia will do security-replacement-of-car-with-another if the car is written off, otherwise do agreed value. Set it to:
    pay out figure + gst + non-running-cost-expenses * monthsoflease.

    sell car Audi privately

    • Salternative on 13/01/2024 - 16:32
      +7

      Just brought a larger car for the missus as the trusty old toyota was getting a bit tight for the family.
      Normally buy 2 yr old cars, and dont exceed 70% of the MSRP, but with covid hangover, sellers wanted 80% -90% of the price, and it got a bit irritating talking to people with their head in sand who dont want to acknowledge that run of the mill cars are depreciating assets , so started going to dealerships .
      Had a look at dealer finance , 7% fixed secured I/R ( i think it depends on your financials as well) , which is high , the add ons were crap , $800 setup fees , $120/year account fees, early prepayment fees , statement fees Yadda Yadda. I did not trust the balloon as well, too high and with too many T and C's at trade in time.
      Novated lease was a joke ( savings seemed to be forced on, they were quoting $31k yearly runnings costs on a cx8 , which is a joke even with depreciation), GST exempt at purchase , but as someone pointed out below , is payable on disposal . In my limited research, only seemed to be barely worth it if you drove long k's for a year, with a cheap electric car .
      If you have access to cash, either free or sitting in home loan offsets , that seemed to be the best option. Even factoring in 15% depreciation /year, $7k/year in petrol, tolls etc, plus opportunity cost of say 6% offset rate on $50k= $3k/year

      In OP's situation , I would go with option 2 or 3 with no or minimal early repayment fees. Normally i would say do it with no balloon, but since he will need a Home loan in the near future, do it for the longest ( 7 year) term with max balloon. This is as banks servicing calculator only look at the monthly repayments, so an artificially reduced repayment will be beneficial when its time for a home loan . Also post and pre tax deductions for a lease are treated the same anyway ( i.e post tax or net) when looking at servicing .

  • spackbace on 12/01/2024 - 17:00

    @ 10% over 3 years

    You'd get a sharper interest rate than that through dealer finance

    • jaesoonee on 12/01/2024 - 17:37

      will stop by the dealer over the weekend and see what they have on offer

    • jrvb42 on 13/01/2024 - 08:57
      +2

      Interest rate differential more than made up for by paying for fuel, rego, insurance, servicing out of pre-tax dollars.

  • randomusername2017 on 12/01/2024 - 17:04
    +20

    Novated Lease vs Dealer Finance vs Bank

    Battle to the death debt…

  • Ryk on 12/01/2024 - 17:14
    +26

    9.29% ouch
    pay cash or you're pissing it up against a wall.

    personally, I'd be reluctant to spend more than 20% of my gross on the purchase of a vehicle.
    163/5=32 - stretch a lease for a mazda3 touring, corolla hybrid, or swift sport. put the savings into your home loan.
    spend 87.5k once your income hits >450k

    but you spend your money however you like.

    • Charmoffensive on 14/01/2024 - 17:54
      +9

      People who have a car loan that's more than 50% of their income are garbage money managers, change my mind.

      • muncan on 15/01/2024 - 08:55

        change my mind.

        my cat’s breath smells like cat food

        • Charmoffensive on 17/01/2024 - 22:08

          Muncan was in the closet making babies and I saw one of the babies and the baby looked at me.

  • Gunther on 12/01/2024 - 17:28
    +5

    Cash

  • Dumax on 12/01/2024 - 17:33
    +15

    Unless you're avoiding ECM (i.e. PHEV or EV), novated lease isn't worth it - best case scenarios usually involve you just breaking even.

    Remember that the NL "financed amount" doesn't include GST so it's artifically reduced (i.e. you pay the GST later on the residual/finance payments) so it's not really "cheaper".

    • jaesoonee on 12/01/2024 - 17:40
      -4

      renting so PHEV or EV isnt on the cards yet. I've seen the backup of model Ys and 3s all waiting in charging stations hence the decision to go hybrid.

      • noone on 12/01/2024 - 18:03
        +2

        PHEV is hybrid though. But I guess the question isn't about what car you should be getting

        • jaesoonee on 12/01/2024 - 18:11
          -5

          true but is less efficient if the electric motor is out of juice

          • noone on 12/01/2024 - 19:06
            +1

            @jaesoonee: If there's a PHEV model that piques your interest, then I highly recommend looking into it.

            The savings from not paying ECM will far outweigh the efficiency difference. You can still charge from free public chargers too.

          • Rally Dave on 13/01/2024 - 08:17

            @jaesoonee: If you haven't charged it, it just drops to the level of a mild hybrid (not rechargeable) as it still uses regen and electric power to make it more efficient.

          • spaceflight on 13/01/2024 - 21:10
            +1

            @jaesoonee: Less efficient than what?

            • jaesoonee on 15/01/2024 - 08:55

              @spaceflight: a full hybrid

              • Rally Dave on 16/01/2024 - 07:03

                @jaesoonee: No, someone has led you down the garden path. If what you are calling a full hybrid is something like most Toyota's (they do have PHEV but haven't been able to make enough of them to bring them to Australia), then you are referring to a mild hybrid. A PHEV acts as a mild hybrid if you don't recharge it. That's the worse they do. If you think of them as a mild hybrid that can do even better whenever you have a power point available. Even better is you have more power of when you charge it and when you drive it as an EV. Such as, coming back from a weekend away, put it in charge mode as you come back along the freeways, then when you get to the city where engines are last efficient, throw it into full EV mode to drive through the traffic. It is amazing how much bad education is out there and it has to be companies like Toyota that have been fighting the change driving it.

      • seannami on 12/01/2024 - 21:31
        +1

        Are you renting in a place with a power point in the garage? Could still be viable if you drive under 100kms/day. I'd agree NVL isn't worth it if it's not FBT exempt.

        EDIT: After another read, keep the Audi

      • UltimateAI on 14/01/2024 - 23:08
        +1

        Absolute garbage, believe everything you see on the TV.
        Trip planner shows the waiting times in advance, stick to the Tesla super chargers, most of the time they are empty and they open up new ones all the time.
        95% of your charging is done at home anyway, you always leave home on a full tank, super convenient and less toxic to your family.

  • Drakesy on 12/01/2024 - 17:43
    +15

    CASH.

    You'd be surprised how much any liability hammers your ability to borrow, $40k savings isn't a lot if you're looking to get a house, especially with a kid.
    Only real benefit is if you were to buy an EV with FBT and GST benefits, the interest rates the Novated Lease companies are charging at the moment are heinous.
    Vehicle repayments are something popularised by America and is a drag on your saving potential.

    In a similar position, no one cares that you drive a brand new Lexus, crash technology hasn't really changed in the last 5 or so years. IMHO save your money.
    Just spend a few minutes browsing through the plethora of similar articles on here to realise how bad of an idea it is.

    • jaesoonee on 12/01/2024 - 17:52

      we're comfortable with buying a property later especially with the prices here in sydney or a potential interstate relocation where prices are more reasonable for the size.

      • Drakesy on 13/01/2024 - 19:37
        +12

        Just my 2 cents

        Paying interest on a depreciating asset is the number one way to never getting ahead, even if it is before tax.

      • UltimateAI on 14/01/2024 - 23:10

        You may struggle with the Novated Leas or Car Loan, I believe that is the point being made.
        For simplicity, if you borrow $100k on a car, your home borrowing power could be reduced by $300k even more, depending on the banks.

  • jasiano on 12/01/2024 - 17:48

    as mentioned, cash is king (well…. bank cheque/direct transfer anyway… unless you want to carry a big suitcase with notes in it).

    those rates are killer… if you don't have enough cash to cover the full purchase amount then a bank loan (if you have a mortgage you can add onto that which is going to be a far lower rate) or find a lower rate personal loan.

  • Euphemistic on 12/01/2024 - 18:27
    +2

    Shouldn’t you be buying a tesla?

    • serpserpserp on 12/01/2024 - 19:25
      +10

      Strange someone on OZB doesn't want to buy an EV or the biggest SUV/4WD they can find…

  • Iwantthebestprice on 12/01/2024 - 18:34
    +44

    No house yet and wanting to finance ~90K car on a depreciating asset. Economics 101 on how to completely destroy your borrowing capacity. Even at your salary you will destroy your borrowing capacity, 163K is about $110K after tax, a decent mortgage for a house is Sydney is about $800K (regional) so monthly repayments of ~$4900 is $60K a year, half your salary… do you really need a $90K car when trying to save for a house OP?

    Edit - and not even buying an EV to claim FTB, someone slap this man straight, please!

    • serpserpserp on 12/01/2024 - 19:26
      +1

      decent mortgage for a house is Sydney is about $800K

      Sydney in NSW? I don't think it is that low….

      • Iwantthebestprice on 12/01/2024 - 19:46

        Maybe you’re right, I compared to regional VIC where I live. If it’s more, then OP is screwed, even on his decent salary

    • Drakesy on 13/01/2024 - 01:51

      "give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime"

      • schwinn on 13/01/2024 - 18:00
        +9

        “Build a man a fire and he will be warm for the night; set a man on fire and he will be warm for the rest of his life.”

        • Drakesy on 13/01/2024 - 18:06

          Your analogy is probably better in this case

    • jaesoonee on 15/01/2024 - 08:57

      avg price is $1.3-1.4m in sydney

  • apsilon on 12/01/2024 - 19:19
    +4

    Maxxia were terrible to deal with on the lease I had with them so could never recommend. Other than that, on your salary you should have a good accountant to run these sort of questions by. A good one is well worth the money spent.

    • serpserpserp on 12/01/2024 - 19:27
      +3

      But no one knows any good ones, so it's money wasted for most people.

  • brendanm on 12/01/2024 - 19:31
    +31

    Saving for a house.
    Buys a $90k car on lease.

    Also, $72 of fuel a month? 35 litres of fuel a month?

    Also, $850 weekly payment

    WT actual F.

    • JimmyF on 12/01/2024 - 22:07
      +14

      Saving for a house.
      Buys a $90k car on lease.

      I know… Plus drives at most 10k a year, has a 5 year old car too.

      Then will be wondering why they have no money!

      • ankor on 14/01/2024 - 14:07
        +1

        But a 5 year old audi ages like a 25 year old toyota when comparing the dollar value of their respective repair costs :P

    • Caped Baldy on 13/01/2024 - 06:54
      +1

      It would be more financially responsible to get rideshare everywhere.

  • Gdsamp on 12/01/2024 - 19:32
    +21

    Bloody hell Lol

    The numbers on NL almost never work out. Yeah maybe some people got blindly lucky because car values increased thru covid but that's over now.
    In this climate the only way it's beneficial is for the FBT Exempt EVs, but it appears that's off the cards for you at present.

    Trade in the Audi and Buy a (new or w/ full service history) Camry or Kluger or CRV, with the balance of trade in add 15-25k and drive it for 10 years.
    at 8-10k kms annually whats the point in spending so much on a car?
    The window is closing on housing in the interstate locations that are comparatively affordable (taking into account potential salary delta)

    • Iwantthebestprice on 12/01/2024 - 19:47
      +12

      This is 100% the most smartest financial advice on this post so far! But I got a feeling OP needs to buy a $90K car to show off, which is the worst financial decision of his life. Shows to much immaturity of a young person making decent money.

      • Gdsamp on 12/01/2024 - 20:26
        +1

        Got that vibe as well. OP if you absolutely must keep up with the Jones's or flex on Instagram it won't be in a Lexus NX. Try a 70 Series land cruiser, or Tesla with custom plates referencing its ev drivetrain

  • SBOB on 12/01/2024 - 19:52
    +21

    $163K salary exc super,
    Estimated 8k-10k km driving a year.
    Total Amount Financed: $87,412.27

    Are you trying to keep up some appearance of being well off to your neighbours or something? Because that's some poor financial decision making.

  • Typical16-bitEnjoyer on 12/01/2024 - 20:05
    +26

    Upgrading due to the kid getting too big for the sedan

    I would be interested in seeing your 6'6 220kg child that cannot fit in a sedan.

  • AustriaBargain on 12/01/2024 - 20:19
    +1

    Marry me my dude. It's legal now.

    • hopper on 13/01/2024 - 16:29
      +1

      He is mine

  • randomusername2017 on 12/01/2024 - 20:46
    +8

    due to the kid

    Kids are always in a hurry these days..have you considered the RX500h F Sport?

  • freefall101 on 12/01/2024 - 22:00
    +7

    Have you looked at the fringe benefits on a novated lease?

    Also, there's something wrong with that calculation

    Total Amount Financed: $87,412.27
    1 Year with NL
    Residual Value: $58,635.611
    Pre-tax deduction/per month: $2,012.92

    How is the residual value down $29k but you've only paid $24k (including interest, car costs, etc, which should be almost half of that)?

    Anyway, I won't bother with how utterly stupid spending $85k on a car when you earn $163k a year is, everyone has covered that. But your numbers look pretty off.

  • JIMB0 on 12/01/2024 - 22:41
    +10

    That's a solid plan for never getting ahead.

  • Matt P on 12/01/2024 - 22:48

    If you are looking at the 1 year lease, then were planning on extending 1 more year, your residual would only go down to the residual you would have had if you took a 2 year lease to begin with. Macquarie cracked down on chaining short terms to lower residual (and thus maximise salary sacrifice) this more than 10 years ago now as its effectively evading the rules.

    I haven't ran the numbers but i'd be surprised if that resulted in any pre-tax deductions in the second year at all.

  • WreckTangle on 12/01/2024 - 23:25
    +4

    Novated leases are only worth it if you get an EV. In your price range you can get some good ones.

    I don’t think your comment about “backup of model Ys and 3s all waiting in charging stations” is valid because that's not my experience. Plus wouldn't you charge at home?

    • Typical16-bitEnjoyer on 13/01/2024 - 10:33
      +5

      Did research on this last year, came to the same conclusion - only worth it for EV.

    • ankor on 14/01/2024 - 14:10
      +1

      The OP is only puttin 8-10k on the odo per annum. So when is he doing past the max range of a tesla? :P

  • Wiadro on 13/01/2024 - 00:36
    +8

    You don’t have a house but you’re buying a car on finance?
    Which finance bro do you follow because you need to fire him

  • Toph Beifong on 13/01/2024 - 01:20

    Another thing if you are considering Novated leasing. I inquired with my companies leasing provider about purchasing a base model Isuzu ute brand new. Would cost $32k if I paid cash. If I decided to lease it, they told me I needed to reduce the payload from 1400kg down to 999kg (ATO requirement). Called the dealer to check what heavy accessories I could fit. Steel bull bar weighs less than 100kg, a tow bar also less than 100kg. If I decided to install these, it would bump the purchase price to almost $40k.

  • cnrmlj on 13/01/2024 - 07:46

    You can put your cash flow into a spreadsheet under each option and then work out the best option. It will be a mathematical outcome with some assumptions. No need for a poll.

  • gromit on 13/01/2024 - 08:15
    +3

    I find it mind boggling that someone on your relatively modest salary would spend that much on a car without even owning a house. regardless get the lowest rate you can, Novated leases are usually of questionable value. basically more than a years after tax income on something that rapidly loses value.

    • mousie on 13/01/2024 - 08:26
      +2

      Their salary is very good.

      It's just a lot of money at sky high interest rates without being adjusted to a life with a dependent.

      There are many unknowns, e.g if their partner is off work for a bit to look after the child. What their rent / mortgage is and the equity associated.

      Fuel costs are too low imo even for a hybrid.

      • gromit on 13/01/2024 - 08:28
        +6

        Their Salary is "ok" not very good and certainly not $90k car on finance good with practically no savings.

        • Save Medicare on 13/01/2024 - 13:18
          +2

          170k is only 'ok'? 😭

        • TightAl on 14/01/2024 - 13:41
          -1

          People work and save all their lives to pass it on.
          You're talking as if a Lexus will depreciate to $0 after a few years lmao.
          Live a little.

        • Cheappy on 14/01/2024 - 15:00

          Wow curious as what is an "ok" salary nowadays. @gromit must be earning big money

  • 2esc on 13/01/2024 - 08:42
    +4

    Whats wrong with the 2017 Audi A3?

    If your only doing 10 thousand kilometres a year and your 2017 Audi A3 it should only have 60 to 70 thousand its only just been run in.

    If you've looked after it why upgrade?

    Put extra into your house, super or investment port folio.

  • joshash on 13/01/2024 - 09:24

    You should be buying a second hand Toyota Camry, with around 110,000km on it (just past the expensive 100,000 km service) - it's that simple.

  • loadofrubbish on 13/01/2024 - 09:53
    +2

    I have novated leased a prado for 3 years and I found savings are 3-4k per year. One bad side of novated leasing (or any other type of loan) is that it will make it hard for you to burrow to buy property if you are planning to buy property during the lease term.

  • Ciderfizz44 on 13/01/2024 - 10:21
    +1

    Where's the required Camry option on the poll? This is ozb champ, no-one will approve your high yield investment.

  • Freitag on 13/01/2024 - 10:31
    +2

    What sedan can’t fit a baby seat? I had 2 in a Corolla, they are currently a 5 & 10 year old in a Honda accord euro sedan no issues.

    If you want to upgrade that’s fine, but this isn’t a reason to do it. Make sure your being honest with yourself.

    • seannami on 16/01/2024 - 06:57

      Kids must be huge there days. My brother and I are tall lanky types and we used to do Melbourne to Brisbane road trips every year in the back of Commodores, Avalons etc (jammed among the road trip snacks etc) until we were 6' and 5'9 respectively. parents didn't get an SUV until mum's hips went out an she couldn't get out of lower cars easily. Brother and I were in car seats in a Magna, Pulsar and a Bluebird.

  • Miss B on 13/01/2024 - 10:35
    +1

    My employer uses Maxxia and I looked into it. It was sooooo much worse than just getting a loan.
    Total cost was:
    Maxxia NL: $77k
    Loan: $56k
    To compare like for like I made it the same amount, i.e. $48k for both assuming insurance and things would be the same, as I didn't have to use the Maxxia ones.
    That is without the tax savings, but I just couldn't see a way to make up the $20k. It was also over 5 years, not 1-3, so that would also change things. Anyway just fully check the figures before agreeing to anything with Maxxia, they have their own finance and insurance companies they use that are expensive.

  • c2pv1ru5 on 13/01/2024 - 10:50
    +5

    I bet OP does not even know he has exceeded the concessional contribution cap

    • brendanm on 13/01/2024 - 13:45

      ?

    • Drakesy on 13/01/2024 - 19:39

      Lol, he has too

    • Dollar General on 13/01/2024 - 19:44
      +1

      Could be some non concessional contributions possibly although that would not be worthwhile or even using prior years unused concessional amounts as top up

      • May4th on 14/01/2024 - 21:07

        probably, I doubt the OP made a conscious decision about that though judging from the post

  • bocca on 13/01/2024 - 11:55

    Novated lease pre tax.

    Can you get paid under an ABN instead? If so a bank loan might be better

    • UltimateAI on 14/01/2024 - 22:51

      Perhaps an EV or Plug-In Hybrid to avoid FBT, but at the interest rate he has been quoted… not sure it makes sense.

  • Dollar General on 13/01/2024 - 12:31
    +1

    At 10,000 km a year it’s not worth upgrading. If you can’t manage with the Audi, sell it and use the same amount to buy something bigger.

    0.0001% of cars out there are worth more today than the purchase price. You ain’t got one of those.

    Make your money work for you not the other way round

  • Save Medicare on 13/01/2024 - 13:22
    +2

    Lots of working class families put 3 adults in the back of a corolla. It'll be a squeeze but you'll be fine.

    Who really needs a new luxury SUV?

    • brendanm on 13/01/2024 - 13:48
      +3

      luxury SUV?

      It's a rav4 hybrid with a Lexus badge.

      • ankor on 14/01/2024 - 14:13

        Rav 4 hybrid cruisers are about 58-60k fully kitted out now it seems. So thats already a huge saving from the lexus!

  • timothy2 on 13/01/2024 - 14:35

    Just because your employer uses maxxia, doesn’t mean they have to supply the finance on your novated lease. Maxxia offer a self serve option, allowing you to get the loan at a much cheaper rate elsewhere, and then have the admin processing done through maxxia. We did this, maxxia was almost double the costs of the NL we ended up going with. Maxxia are shit (profanity) and rely on people who do not do enough research into how this all works and all the options available

  • Powershopz on 13/01/2024 - 16:13
    +7

    "Upgrading due to the kid getting too big for the sedan with a baby seat and planning to keep the car"

    Don't feed into the media/society bias that as soon as you have any child you need a bigger car / suv.

    Sedans are perfectly fine up to 2 kids (minor exception if you have twins/within 12 months of each other).

    You're absolutely crazy to be even contemplating buying a luxury car when you don't even have a house.

    Primary residence should be at the top of any money smart person's shopping list in Australia. It's one of the best places to put your money if you want to stretch it.

  • mungas on 13/01/2024 - 16:36
    +1

    You may be aware but there are substantial FBT savings for zero or low emission vehicles. A car needs to be under the LCT, but that's broadly $90k.

    If you novate through your employer, they can structure it via a salary sacrifice. What would normally happen for a novated lease is the employer basically puts pre tax funds aside to repay your novated repayments. What would traditionally happen is the the employer is then levied FBT. FBT represents a tax for benefits provided to employees. They have no interest in bearing the FBT cost, so they would normally recharge it to you. In simple terms, the additional tax they are levied on is recharged to you, which brings you close to an after tax funds situation, thus making the pre vs post tax funds benefit broadly similar (putting the GST aspects aside).

    If your car is an eligible no or low cost emission vehicle, then no FBT should be payable by the employer, which basically means you wont be recharged for the FBT on lease repayments. It should theoretically make the car cheaper by your average tax rate, ie say 30%.

    In summary, check with Maxxia whether your car qualifies, as you could actually get it overall cheaper via a novated lease through salary sacrifice.

    • justwii on 13/01/2024 - 22:42

      What about buying the car in full first, then do a sell and lease back but at a much cheaper price, to lower the loan?

      • mungas on 13/01/2024 - 23:13

        Who are you selling to? And I don’t understand the purpose of this? Are you trying to make money by buying and selling higher than you bought?

        • justwii on 13/01/2024 - 23:30

          The NL company, its a common practice for them to do NL on existing cars people own already.

          No, to be beneficial on the FBT, you save on the running costs (fuel, rego, insurance, etc.) but you lose money on loan interest. So if you can bring down the loan amount, wouldn't it be more saving at the end?

          • mungas on 14/01/2024 - 08:10
            +1

            @justwii: Without calculating the impact, I don’t believe the numbers would stack as the employer would be able to generally access the GST on the purchase under a novated lease arrangement, which makes this arrangement further attractive, whereas you won’t be able to if you bought personally.

            Under a sale and lease back scenario, you personally arent able to claim the GST on the initial purchase from the dealer as you need to be registered for GST. To be registered for GST you need to be in business or conducting an enterprise. When you sell to the novated leasing business (second sale), they can’t claim the GST on your sale to them as you aren’t registered tor GST and therefore wouldn’t have attached GST on the sale. They are therefore starting with a sale price likely higher than if they arranged it directly under a novated lease arrangement

            • justwii on 14/01/2024 - 14:20

              @mungas: Good pointing out the GST part. No deal.

    • TightAl on 14/01/2024 - 13:42
      -1

      TBH this is not a thing, the resale on EVs are absolutely terrible, whatever perceived upfront savings will be negated when you need to sell it.

  • bmerigan on 13/01/2024 - 22:21

    I recently ended a 3 year lease. I did a lot of calculations and comparisons of the different ways to pay. Lease and home-loan refinance basically came out the same after I negotiated them on their interest rate a bit, so I chose lease for the convenience.
    You can get much cheaper insurance than what they offer.

  • Ace26 on 14/01/2024 - 02:15
    +2

    Been there done that and regret to say that car purchases on finances are bad news on the long run. Kid will be fine, save money and keep the current car until you can pay cash for a new car. With the repayment you mentioned above, you can service an investment property. Make a wise decision my friend.

  • May4th on 14/01/2024 - 09:01

    NL is false savings if you have to pay the FBT tax. pay cash or buy an EV/PHEV on NL

  • Vavoom on 14/01/2024 - 10:50
    +3

    Good on you for asking for advice as you've gotten some good stuff here. I always wondered how so many young (30 and under) people driving Audis, Mercs, Beemers, etc were affording it not to mention the infamously expensively yearly maintenance costs, insurance, etc. I guess the answer is they were capping their long-term potential to look good in the short-term and putting their head in the sand in regards to the numbers.

  • Noophe on 14/01/2024 - 12:01

    Double your running costs and submit claims twice, novated lease then will always win

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