Salary Packaging Card vs Novated Lease. Which is Better?.

Let’s be clear, your salary packaging card has its place. It’s a true perk and perfect for all of your day-to-day living expenses.

But it can be used ineffectively too. One problem is that if you’re using your salary packaging card on vehicle expenses, you’ll hit the cap that much quicker.

Here’s a really good tip. As a WA Health employee, you can now boost your salary packaging benefits using a holistic benefit that you may be less familiar with: a Paywise Novated Lease – better understood as salary packaging all of your cars running costs, from fuel to insurance.

What’s a Novated Lease?

The way it used to be is that if you wanted a new car you had two options. One: you could save up the cash for it under a mattress or in the bank until you could pay the dealership. Or, two: get a bank loan, and pay interest for your depreciating asset.

Fortunately, as a WA Health employee, there is a third and much wiser option.

For most people on a full-time salary, the smartest option may be a Novated Lease.

“A Novated Lease is an agreement between you, WA Health, and Financier that allows you to pay for your car and its running costs using your gross salary instead of your net salary.”

A Novated Lease helps cover the costs of your vehicle (not just the purchase price). It’s one of the perks of working with WA Health: you can get a fleet discount, save on tax and roll all your running costs into a convenient pre-tax payment.

Paying for your car using pre-tax income might initially make it look like your take-home pay is a little less, but once you realise you can ditch all the car expenses from your budget (like maintenance, rego and fuel), you’ll see it actually puts you way ahead.

How do I arrange a Novated Lease?

Already have a car in mind? Use the Paywise online calculator (click here) to check that it will be comfortable in your pay grade.

Then get in touch with us at Paywise. We’ll arrange the whole thing for you, we will even deal with your employer on your behalf. Once everything is tee’d up, we send you the documentation to sign and we’ll arrange the delivery of your new car (or leasing of your current car if it’s under 10 years old)

Your car doesn’t need to be brand new. Almost any vehicle under 10 years old can be placed on a leasing program, with the exception of motorbikes.

How easy is it to convince my boss to let me Salary Package a car as well?

You don’t need to convince anyone. We do all the legwork to set up the arrangement, plus a whole lot more. Here’s what a satisfied customer from WA Health Employee had to say:

“The customer service representative who I spoke to on the phone yesterday was fantastic. They helped me out so much – not only getting the funds in holding released quicker but also to maximise my benefits and make sense of the whole process. Really excellent customer service and I very much appreciated it.”

What happens to the car at the end of my lease?

You have a few options. The most common one is for a lessee to upgrade to a new model. But if you were retiring, let’s say, you may want to buy out the car for its agreed value, or sell it off to another party and either keep or pay the difference on its market value. Paywise makes the process simple.

How much is my current car worth?

If you’re looking at leasing your current car to reap the benefits of a Novated Lease, you can find an estimate of its going rate (sans damage, based on a flawless service history) through Redbook or Kelly’s Blue Book, the latter of which launched in Australia last year.

How much could I save with a Novated Lease?

If you’re on a salary of $80,000 and leased a car valued at around $30,000, you’ll save around $2,900* each year just in tax. Even better, you get to keep your salary packaging card and all the savings that go along with that – all without your car affecting your cap.

Learn more, or get a quote today.

*Figure is an estimate based on a 4-year medium-sized vehicle driving 15,000 km per year.

November 25th, 2019