Many people prefer purchasing second-hand cars over new; they are almost always cheaper than new or demo vehicles, they are often more readily available than their new counterparts, and there is a far wider range available so you are not limited to latest models. Whatever the reason, second hand cars can prove a great option when looking for your next vehicle. However what some don’t realise is you can salary package a second-hand or existing vehicle through Novated Leasing. There are multiple benefits and cost savings to be gained through salary packaging a second-hand vehicle, as outlined below.
Same as new vehicles
The great thing about salary sacrificing a second-hand vehicle is that you gain all the benefits that you would get if entering into a Novated Lease for a new car. You will still save on vehicle expenses and tax, plus enjoy the ease of salary sacrificing as a finance option just like you would with any other Novated lease.
You can Novate your current vehicle
In addition to being able to lease new and second hand vehicles, it is also possible to move your existing vehicle over to a Novated lease. Although some restrictions do apply, it can be an effective way to reduce tax and increase vehicle-related discounts. If the car is already being financed, your chosen Novated Lease provider will refinance the vehicle and include all running expenses within the novated lease, essentially bundling all your car costs into one just like any other Novated Lease.
Novated lease arrangements result in savings across many car-related expenses. Discounts are generally offered on fuel, maintenance, roadside assistance and accident management. These multiple savings not only result in noticeable savings on expenses over the term of the lease, but are also bundled into one invoice for added convenience and easy budgeting.
Tax & take home pay
One of the great things about taking advantage of a Novated Lease is that your tax is reduced. This is due to the fact that your vehicle’s leasing and running costs are deducted from your pre-tax salary, often increasing your take home pay in the process. Another big tax drawcard is that you pay no GST (Goods and Services Tax) on the running costs or purchase priced of your leased car. This can result in huge savings over the life of your lease, and you will start saving from day one.
Although there is no denying the benefits of choosing to salary package your second-hand vehicle, there are also restrictions. The vehicle you purchase must be in good working condition, be up to date with manufacturer’s recommended servicing, and be registered at the lease commencement. Vehicles also cannot be older than seven years old at the end of your lease. Despite these restrictions, it is definitely worth considering a Novated Lease when looking to purchase a second hand vehicle. The benefits and cost savings could potentially save you thousands.