Myths about Novated Leases.
There are so many misconceptions about leasing that we are helping you to understand the common myths!
Myth 1
I don’t drive enough kms.
Reality
There is no minimum target to reach and there are tax and GST savings received regardless of the number of kms driven.
Myth 2
Only new cars can be salary packaged
Reality
A new, demonstrator, used or your current car can be salary packaged. We have access to fleet discounts on new cars and the car can be salary packaged until it is 12 years old.
Myth 3
My salary isn’t high enough.
Reality
If you are currently paying tax, there are savings to be made!
Myth 4
Employers have to do too much admin
Reality
Paywise will advise your employer of the deductions to be made from your salary.
Myth 5
I don’t own the vehicle
Reality
You are the registered owner and can utilize the car as you wish during the lease period.
Myth 6
The car is handed back at the end of the term
Reality
There are four options at the end of the novated lease:
- Upgrade your car using trade/ sale proceeds to payout residual balance
- Refinance the residual and continue to salary package the same car
- Pay the residual to own the car outright
- Sell/trade in the car and salary package another car (you keep any profit on the sale)
Myth 7
The car has to be used for business use.
Reality
The car can be used 100% for private use and there is no business use requirement.
Myth 8
The car can only be taken to ‘Paywise service providers’
Reality
A card will be provided which will give you access to the money in the Paywise account. This card can be used at many places across Australia to pay for maintenance, servicing, tyres and fuel. If the card is not accepted at your chosen provider, you can make the payment and send Paywise a copy of the bill with proof of payment and the money will be reimbursed into your nominated account.
Myth 9
Only I can drive the car
Reality
Any driver which you nominate can drive the car. Novated leases can also be arranged for family members.
Myth 10
The novated lease has to be paid out if changing employers
Reality
The novated lease can be transferred to the new employer’s contracted salary packaging provider. Most employers in Australia have a salary packaging provider however if not, the car payments can be maintained through direct debit similar to a standard loan.
Myth 11
It’s too good to be true.
Reality
Novated leases are approved by the Australian Tax Office and are offered by many employers across the country as a staff benefit.
Myth 12
Accessories cannot be added to the car
Reality
Accessories can be included in the novated lease when Paywise is arranging payment to the seller and this way you will also save the GST on these items.