Novated Leases

A Guide to
Novated Leases
www.sgfleet.com
Improve the
Weekly Budget
A holiday, new clothes or just a bit more money in the
wallet; whatever the reason, everyone should consider the
potential improvements a Novated Lease can make to any
weekly budget. It’s as easy as calling sgfleet and taking
out a Novated Lease on a motor vehicle. sgfleet may even
be able to buy a driver’s current vehicle and lease it back.
The information contained in this brochure will give a basic
introduction to a sgfleet Novated Lease.
Turn the Weekly
Budget From This...
NON-Salary Packaging (weekly)
Net Income
Mortgage / Rent
$160.00
Food
$250.00
Bills
$150.00
Living
$220.00
Car Running Costs
Total Expenses
What is a Novated Lease?
A Novated Lease is simply an
arrangement between an employee, their
employer and sgfleet that may help a
driver to save money on their next vehicle
$1,430.00
$-30.00
sports coupe.
In addition to purchasing a brand
new vehicle, used vehicles can also
be leased which includes sgfleet’s
driver to save money on their personal
selection of quality ex-lease vehicles.
motor vehicle and operate it in a tax and
The current selection can be viewed
cost-effective manner. This is called a
at www.sgfleet.com.
salary packaging arrangement.
Because individual financial situations
There are many benefits to this style
differ, sgfleet has designed a calculator,
of arrangement, from potential income
available at www.sgfleet.com, in order to
tax savings, through to registration,
allow individuals to better understand the
insurance, fuel and maintenance
savings that are available. Or alternatively,
all being net of GST, plus access to
vehicle can be chosen that suits each
Balance
$50.00
$100.00
a sedan or wagon, or even a 4WD or
purchase. A Novated Lease will allow a
sgfleet’s vehicle fleet discounts. Any
$500.00
Car Loan
Fuel
individual’s lifestyle and budget, from
$1,400.00
...Into This!
Salary Packaging (weekly)
Net Income
Mortgage / Rent
Car Loan
Food
$1,200.00
$500.00
$0.00
$250.00
Bills
$150.00
Living
$220.00
Fuel
$0.00
one of the friendly Novated Sales
Car Running Costs
$0.00
Consultants at sgfleet can be contacted
Total Expenses
to discuss the best possible solution.
Balance
“...sgfleet has designed a calculator available at
www.sgfleet.com in order to allow individuals to
better understand the savings that are available.”
$1,120.00
$80.00
sgfleet is a global fleet management
company with over 25 years’ experience
and offers expert knowledge, great
savings and superior service on a full
suite of Fleet Management Services.
From a range of salary packaging options
and Novated Leases for individuals to
Corporate Leases for fleets, sgfleet can
tailor a solution for every need.
What’s Included
in a Novated Lease?
Simplicity for the driver is the aim, so most vehicle related
expenses can be included in an sgfleet Novated Lease.
Optional inclusions
and their benefit:
total loss, the greater of market value or
lease payout is paid, ensuring no concern
about potential gap payments.
Comprehensive Insurance
LeaseGuard
Comprehensive insurance can be
LeaseGuard provides cover to drive a
included in the monthly rental of a
Novated Lease vehicle with confidence
Novated Lease with premiums fixed
and peace of mind. In the event of
for the life of the lease. The financial
involuntary termination or retrenchment,
benefit is that insurance premiums
LeaseGuard will cover monthly finance
are paid from pre-tax salary, ensuring
payments on the vehicle for a period of
tax savings. Another benefit of the
unemployment (limits apply), whilst still
specifically tailored comprehensive
allowing the vehicle to be driven. Contact
insurance offering is that in the event of
sgfleet for more details.
Auto Credit Program
The sgfleet Auto Credit Program gives
complete peace of mind with the
program ensuring lease payments are
covered through periods of accident
Novated Leases
or sickness (limits apply). As with the
comprehensive insurance, premiums can
A portion of the vehicle finance and
be paid out of pre-tax dollars providing,
running costs are paid using pre-tax
tax saving benefits. A Novated Sales
dollars, potentially providing income
Consultant at sgfleet can discuss
tax savings. Vehicles may be financed
including this program in the lease.
net of GST and additional savings can
Extended Warranty
also be achieved through sgfleet’s
If a driver is considering keeping the
vehicle at lease expiry and wants the
Salary Packaging inclusions
Benefits of
benefits of an extended warranty
Financial
purchasing power.
Flexibility
program, then a sgfleet consultant
A Novated Lease gives the flexibility to
One fixed payment in line with the payroll cycle, for the life of the lease
can be contacted to discuss including
choose almost any vehicle, new or used,
an extended warranty program within
including an ex-lease vehicle from sgfleet.
Vehicle purchase, including direct delivery and a full tank of fuel
the lease. Payments will be made from
The term of the lease can be chosen as
tax-free dollars, so the financial benefit
well as any extras to the vehicle, including
will be received from day one. This
window tinting and DVD players that are
program is fully transferable and worth
paid with pre-tax dollars.
Maintenance in line with the manufacturer’s log book*
Fuel card to purchase fuel for a nominated number of kilometres*
Replacement tyres included up to an agreed number or budget*
Registration and CTP costs included
Comprehensive Insurance
Roadside Assistance*
Optional payment protection in the case of illness or unemployment
Extensive range of vehicle accessories*
* Paid with pre-tax salary, net of GST
considering even if the driver plans on
selling the vehicle at lease end.
Convenience
Roadside Assistance
Convenience is everything, so sgfleet
The Roadside Assistance Service ensures
have included an easy payment option
that drivers won’t be left stranded and
that is managed by sgfleet and the
offers drivers immediate assistance in
employer, and includes the vehicle
case of the unexpected. The Roadside
running costs like maintenance, fuel,
Assistance Service will assist from a
insurance and registration. Hassle-free
simple jump start to minor mechanical
budgeting can be enjoyed with the
repairs 24/7, 365 days a year, anywhere in
costs known in advance, with the lease
Australia. The package has been tailored
payments fixed for the term of the
to suit the needs of drivers.
arrangement.
Novated Lease
Case Studies
sgfleet understands that everyone’s financial and personal
situations are different and have provided these two
case studies to demonstrate the importance of sgfleet
understanding each person’s position before providing a
firm quote. To find out the potential savings available under
a salary packaging agreement, call sgfleet on 1300 138 235.
FAQs
Q. Is Novated Leasing for
everyone?
Novated Leases are beneficial for about
80% of people who drive a car. The three
variables which affect the savings that
can be gained from a Novated Lease are:
per annum before tax. She lives near work but likes to get away on the weekends
on a regular basis. Charlotte requires a large car and will travel 40,000 kilometres
per annum. She has selected a 4-year lease term. In the below example, Charlotte
is over $180 per week better off under a salary packaging arrangement rather than
purchasing the vehicle outright with post-tax dollars.
Salary Packaging
Outright Purchase
Gross Salary
$195,000
$195,000
Less Salary Sacrifice
$16,956
$0
Taxable Income
$178,044
$195,000
Tax on Taxable Income
$56,496
$64,225
After Tax Contribution
$9,361
$28,013
Net Income
$112,187
$102,762
Weekly Net Income
$2157.44
$1976.19
over 20,000 kilometres per annum and is looking for a 4-year lease term. In the
below example, Daniel is over $50 per week better off under a salary packaging
arrangement than purchasing the vehicle outright with post-tax dollars.
on used vehicles. For more information
contact one of sgfleet’s consultants.
to obtain a quote to get a better idea
of how much can be saved under a
No, the vehicle does not need to be used
Novated Lease arrangement.
for business purposes to save tax under
Q. Is there a limit on the type of
vehicle that can be novated?
a Novated Lease arrangement. In fact,
One of the benefits about Novated
usage. Under a Novated Lease, the main
Leasing is that there are generally few
variable that affects the amount of tax
restrictions on the type of cars that can
savings that can be achieved is the
be novated. Novated Leases are typically
number of kilometres driven per year.
used for personal cars (as opposed to
generally Novated Leases are better
suited for vehicles with mainly private
company cars), so it is generally up to the
Q. What is Fringe Benefits Tax?
employee to choose their own car.
Fringe Benefit Tax (FBT) is a Federal
Vehicles over 1 tonne in payload carry
certain conditions and motorbikes
types of cars that can be purchased
under a Novated Lease.
Q. Can a Novated Lease be
obtained on a used car?
Yes. In addition to new vehicles,
Novated Leasing is available
Salary Packaging
Outright Purchase
for used vehicles, or even
Gross Salary
$45,000
$45,000
a driver’s existing vehicle.
Less Salary Sacrifice
$6,708
$0
Taxable Income
$38,292
$45,000
Tax on Taxable Income
$5,612
$7,725
After Tax Contribution
$2,800
$10,179
Net Income
$29,880
$27,096
Weekly Net Income
$574.61
$521.08
The salary sacrifice amount and after tax contributions are approximate only and are calculated based on the cost of finance as at March 2012. Running costs included in the comparison are maintenance, initial
and annual registration, comprehensive insurance, roadside assistance, up to 4 replacement tyres and a monthly provision for fuel. Please also refer to the disclaimer on the back page.
available visit www.sgfleet.com.
Q. Does the car need to be used
for business to save tax?
An sgfleet consultant can be contacted
employers may put restrictions on the
and is looking to lease a vehicle with a drive away price of $14,420. He travels just
maintained. To see the selection of cars
type of vehicle and number of kilometres
Lease agreement. In addition, some
Daniel is a full-time worker, new to the workforce. He earns $45,000 per annum
and have been regularly serviced and
• The cost of the car
cannot be financed under a Novated
Case Study #2
in most cases, only 2 to 4 years old
Conditions do apply around the age,
are driven
Charlotte is the Operations Manager at a national organisation and earns $195,000
vehicles are of excellent quality and
• Income
• How many kilometres per year
Case Study #1
of premium ex-lease cars. These
sgfleet also has
a selection
Government tax imposed on employers
on the value of certain fringe benefits
that have been provided to employees
in respect of their employment. The
FBT year runs from 1 April to the
following 31 March. sgfleet makes
FBT calculations simple with a range
of easy to use solutions
including online
calculators.
Want to Know More?
At sgfleet we believe in the consultative approach. We prefer to talk to you,
answer any questions you may have and ensure you totally understand our
Novated Lease solutions.
For more information on Novated Leases and to find out exactly how much
you can save, call one of our Sales Consultants now on 1300 138 235.
sgfleet have made every attempt to ensure that the material contained in this brochure is factually correct. sgfleet does not purport to
offer legal, financial or taxation advice. Employers and employees should seek independent advice as to the implications of a Novated
Lease transaction. The salary packaging amounts and take home pay calculations set out are estimates only. While due care is exercised
by sgfleet to ensure integrity of the estimates it does not make any warranties, express or implied as to its accuracy or completeness.
Note that the amount of any FBT actually paid by the employer is not within the control of sgfleet and is dependent on a number of
factors, including the characterisation by the employer of the type of benefit received by the employee and the actual level of usage
by the employee of the motor vehicle for both private and business purposes. Employees should ascertain from the employer how it
intends calculating the amount of any FBT which it will pay in relation to the benefit provided in connection with the proposed lease.
Based upon that information, the amounts of the provisions set out in this brochure may need to be varied. Full terms and conditions
are available on request.
1300 138 235
www.sgfleet.com