5 Essential Advantages of Novated Leases with Braid Finance

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Navigating the complexities of car financing can be daunting, but Braid Finance simplifies this process with a comprehensive guide on a popular option: the Novated Lease. This unique financing method not only aids in the acquisition of your vehicle but also covers some running expenses, potentially reducing your taxable income. Understanding whether a Novated Lease is the right choice for you is crucial, and this article is designed to demystify it.

What is a Novated Lease?

A Novated Lease, a prevalent option offered by Braid Finance, is a tripartite agreement involving an employee, employer, and a lender. Also known as “Salary Sacrificing,” this option allows employees to finance their vehicle as part of their salary package. In this arrangement, the employer pays for the car lease and running costs directly from the employee's salary. This innovative approach provides the benefits of car ownership without full responsibility until all repayments are complete.

The Mechanics of a Novated Lease

Under a Novated Lease with Braid Finance, the employer agrees to purchase a vehicle on behalf of the employee and makes loan repayments to the lender. These repayments are deducted from the employee's pre-tax salary, leading to potential tax benefits. This arrangement ensures that employees enjoy the convenience of a vehicle without the upfront financial burden.

Types of Novated Lease Offered by Braid Finance

  1. Fully Maintained Novated Lease: This includes all vehicle operating costs within the salary package. It’s an all-encompassing option that Braid Finance recommends for those seeking hassle-free car ownership.
  2. Non-maintained Novated Lease: Here, you handle the vehicle’s operating costs, while the lease repayments are made from your pre-tax salary. Braid Finance suggests this for individuals who prefer more control over their car expenses.
  3. Novated Operating Lease: This lease allows you to use the vehicle with no obligations or rights to it after the lease term ends. Braid Finance recommends this for those who frequently update their vehicle.

Benefits of Choosing a Novated Lease with Braid Finance

  • Tax Advantages: One of the most significant benefits of a Novated Lease is the potential reduction in taxable income and the avoidance of GST on the vehicle’s purchase price.
  • Flexibility and Convenience: Braid Finance offers flexible lease terms and a variety of vehicles to choose from, ensuring you find the perfect match for your needs.
  • Ease of Budgeting: With a Novated Lease, your vehicle expenses are consolidated into a single, predictable payment, making financial planning easier.

Considering a Novated Lease with Braid Finance

When contemplating a Novated Lease, it’s essential to understand your financial situation and car usage needs. Braid Finance provides expert advice and tailored solutions to ensure that your car financing choice aligns with your lifestyle and budget.

The Braid Finance Advantage

Choosing Braid Finance for your Novated Lease means you’re partnering with experts who offer transparent, customer-focused services. Our team is dedicated to providing you with the best car financing solutions, ensuring a smooth and stress-free experience.

A Novated Lease is an innovative way to finance your vehicle, offering a balance of benefits and commitments. If you believe this financing option aligns with your needs, Braid Finance is ready to guide you through the application process. Contact us today to begin your journey towards a smarter way to finance your next car.

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FAQ

A Novated Lease is a three-way agreement between an employee, their employer, and a finance company. It involves the employer making car lease payments on behalf of the employee, taken from their pre-tax salary, also known as salary sacrificing.

In a Novated Lease, your employer agrees to take on the responsibility of your car lease. The lease payments are deducted from your pre-tax salary, potentially reducing your taxable income. The employer pays the finance company directly.

Braid Finance offers three types of Novated Leases: Fully Maintained Novated Lease, Non-maintained Novated Lease, and Novated Operating Lease. Each varies in terms of what expenses are included in the lease and who is responsible for them.

Yes, one of the key advantages of a Novated Lease is the potential tax benefits. Payments made from your pre-tax salary can reduce your taxable income. Additionally, you can avoid paying GST on the purchase price of the vehicle.

Generally, you can choose a wide range of vehicles under a Novated Lease with Braid Finance. However, specific terms and available options should be discussed with Braid Finance to understand any limitations or guidelines.

If you change jobs, the Novated Lease can be transferred to your new employer, or you can continue making repayments directly. It’s important to discuss this with both your current and future employers.

At the end of the lease, you typically have three options: purchase the vehicle by paying the residual value (balloon payment), extend the lease by refinancing, or trade in the vehicle and start a new lease.

Potential downsides include not owning the car until the lease ends, the requirement of a balloon payment at the end of the lease, generally higher interest rates and fees than standard car loans, and possible employer restrictions on car usage.

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