New Comprehensive Insurance Underwriter

Paywise wrote to all novated lease members in June 2022, communicating that we’d be reviewing the insurance market to ensure we’re offering the best possible insurance cover. We have assessed a number of providers in relation to product inclusions, levels of coverage, service and claims experience, and decided to change to an alternative provider, Aioi Nissay Dowa Insurance Company Australia Pty Ltd, locally known as Adica.

Adica is an Australian operated and regulated insurer (AFSL License Number 443540) and part of MS&AD Insurance Group Holdings Inc. – a world Top 10 ranking Insurance and Financial Service group with a global network of subsidiaries and branches in 49 countries and regions.

Under the Adica comprehensive insurance policy available for our members, GAP cover is an automatic inclusion. In the case of a total loss, the GAP component covers any difference between market value and the outstanding amount under a finance contract, up to an additional 25% of the market value.

This move has enabled Paywise to reduce premiums across our member base by 17.5%. This means an average premium decrease of $25.28 per premium per month or $303.36 per year.

We are writing to all Paywise members to advise them of the individual changes which will come into effect under the Paywise comprehensive insurance policy underwritten by Adica. This change will come into effect from 1 October 2022.

Labor’s new tax plans

In our July edition of the Paywise Newsletter, we updated our corporate contacts on the Labor Government’s planned FBT exemption for electric vehicles (EV’s).

Since then, our tax advisors, Grant Thornton, have advised that the Government has introduced draft legislation to give effect to a pre-election promise to exempt (non-luxury) electric cars from fringe benefits tax (FBT). Plug-in hybrid electric cars have been added to the exemption as well.

The exemption will cover zero or low emissions vehicles, being:

• Battery electric vehicles
• Hydrogen fuel cell electric vehicles
• Plug-in hybrid electric vehicles – If the car has an internal combustion engine, it will only qualify if it can be recharged by an off-vehicle power source.

Second hand cars can qualify, but only if their first retail sale was on 1 July 2022 or later.

Grant Thornton advise that the exemption is to apply retrospectively from 1 July 2022, but only to cars first held and used by a person (i.e. any person) on 1 July 2022 or later. This is described as the first retail sale being on or after this date. Cars ordered prior to 1 July 2022 will qualify if they are not delivered until 1 July 2022 or later.

Paywise cannot provide quotes for novated leases under a draft bill. We must wait for the bill to become an Act of Parliament so that we can deal with the legislation and possibly further advice from Grant Thornton.

Paywise Sponsors the ‘Liberate Lives’ Charity Lunch in Perth

Paywise was proud to have sponsored the recent ‘Liberate Lives’, AFL-themed lunch in Perth, supporting the Ruben Centre.

The Ruben Centre is a non-profit, faith-based organization striving for an empowered and just Mukuru community by providing quality education, health, financial and social services to thousands of children and families in one of the largest slums in Nairobi. It also offers a vital source of community development programmes.

MC’d by Tim Gossage (an Australian sports commentator and Australian rules football coach based in Perth), the lunch featured sporting identities Glen Jakovich (ex-West Coast Eagles AFL player), Drew Petrie (ex-North Melbourne Kangaroos AFL player), Michelle Cowan (Australian rules football coach who was the inaugural head coach of the Fremantle Football Club in the AFL Women’s competition (AFLW)) and Geoff Hendriks (WAFL premiership player and father of Chicago White Sox pitcher, Liam Hendriks).

https://www.rubencentre.org/

My existing lease is coming to an end. What do I do?

The benefits of purchasing and running a car under a novated lease in Australia can be so advantageous that it would be a shame to lose that employee benefit, which can gross-up your salary – meaning, you are using your salary more wisely to afford more than you otherwise could.

So, when your existing novated lease is coming to an end, there is a significant choice to make to ensure you continue to experience the benefits of salary packaging your car.

Upgrade your car

Under this option you can trade-in your existing car or sell it privately. You can then use the proceeds to pay out the residual balance owing to the financier. Be aware, that lead-times on new cars are longer than they have been traditionally, so speak with Paywise as soon as possible.

Refinance your car

Under this option, Paywise can establish a new lease for your existing car’s residual balance. You’ll continue to have the benefits and convenience of the novated lease package you’ve previously enjoyed, while continuing to pay down the outstanding balance owing to the financier.

Payout the residual balance

At the end of the lease term, your car will have a residual balance owing to the financier, which you can choose to payout directly. Please note that this payment, as well as all future car running costs will be from your post-tax salary and you will no longer be eligible to the GST and PAYG tax savings that you’ve previously enjoyed.