Euro on Lease

[nav12c]

Hi Guys,

I have been reading a fair bit on this forum relating to the Euro Lux (so thanks).

My mind is now made up and I have gone out and test driven the 05 model and WANT IT!

My question relates to the Euro on leases. I can get a fairly good novated lease packaged into my salary. Does anyone on here do this? and if so, any major advantages or disadvantages?

Also, i have found that i can go out and get a better deal frfom the dealers than the lease company can get the Euro for (I understand the lease company looks at GST exclusive price). Anyone got any comments on this?

Many thanks,
Nav

[kanthan]

i got a mob called private fleet to find my car. they got quotes from all the honda dealers and came back to me. i was not able to better it on my own. so i purchased the car through them. plus they gave me free roadside and some membership program...they might try to sell u paint protection and tinting but thats up to you.

[bigdongers]

I think he was referring to a lease agreement with the Euro rather than getting a broker to buy it for you.

I have an option for novated leasing too with my company. I guess in the end it depends on how much the annual cost is vs how much it would cost to buy it yourself and claim the business usage of the car from tax. You also need to factor in how long you plan to keep the car and how many KM's you will do each year.

I worked it out on my CRV and its cheaper to buy it and claim back the tax each year. Obviously this only works if you use the car for business purposes. If its private usage mainly and your company offers a novated lease, its a good way to reduce your taxable income.

[qmjona]

I lease my car, for me there is no cheaper option, as I do high ks and fall into the lowest FBT bracket. The total cost of running the car this way is definitely less than buying it myself and paying all the running costs out of pocket. The only real downside for me is being tied into a contract, even though you can get out at a cost, I would prefer the flexibility to sell/buy whenever I wished. eg. if my work changes my k's drop back, I would be better off just buying the car, but I'll have all the hassle of exiting the lease early. Your work or lease co. should have a simulator where you can see all the cost options clearly before you make any decisions.

[UNLS1]

you have PM

-jimmy

[integraz]

if you travel alot during the day.... like approx 100km a day you will benefit from the lease... but if not like lets say u do onli about 30-40 then it wont be a good idea

[kanthan]

it might be a good idea going and seeing an accountant. i went to see one and he put down all the options i had and for what i was earning and for what purpose i was using the vehicle for, Hire purchase and novated lease was not the best option. it was easier claiming the kms from tax and using a fuel card provided by the employer. Situations vary depending on your needs and income. you can get great tax breaks if you earn over a certain amount of money.

[Stargazer]

I originally looked into getting the Euro on a novated lease. I came so close to signing it before my workmate talked me out of it.

A novated lease is good if you do a lot of kms, IIRC, ~25000km/year is the sweet spot for FBT and depreciation of the vehicle.

The overall package I was offered was actually quite good too. The package included service costs, 4 tires changed a year, insurance and the likes. And whatever costs you don't end up using gets stored in a "bank" of funds. They told me that, say for example, fuel costs came down and I ended up using less fuel money than they budgeted for, they store the difference. If after a while I've accumulated a large amount of excess funds, I can opt to alter the contract temporarily and pay less per cycle so they can siphon the difference from the amount I have saved up.

The same goes if fuel costs skyrocket, you'll have to pay the difference if it gets too out of hand. But their estimates for fuel consumption are usually on the "assume the worst efficiency" mentality.

The only things that put me off it were (and some have been mentioned by others) the lack of freedom when it came to selling your car. Also, the most financially effective contract length for me was 4 years. 4 years... 25000km a year... I'd end up having a 100000km car at the end of it that I didn't own (the residual value worked out to be something like $15k).

I also had to consider whether I would really do 25000kms in a year. I've had my euro for 11 months now, and it's sitting below 15000km at the moment. This is why I ended up buying one instead. Much more freedom in how I drive and when I sell.

My wife has a leaseback on a vehicle from her work. One of the reasons why I enquired about a novated lease was because of her costs. They only charge her $88 a week, they include unlimited fuel as long as you're not on leave and fill up at their own fuel depot, and all service, insurance etc is paid for. She doesn't get to choose any car though, only from a set range ie. falcons, commodores, outbacks and a few others. I thought a novated lease would be close to this cost, but they ended up quoting me 251 per week for a lux.

[jolt]

I work for a company that specialises entirely in salary packaging and novated leases. Please feel free to call and speak to one of our consultants and they will give you a customised estimate on the specific details of your own situation.

1300 762 788
www.prosperion.com.au

It is so much better to talk to a real person about what is best for you rather than trying to apply a really general reply on a forum to your own situation. If it's set up properly, you don't need to travel 25,000km's a year to save a whole heap of money and a four year lease is almost the least benefitial term for anybody!!

regards
Rod

[Nikoy]

becasue i run my own business i leased my car using a chattle morgatge. For me its just like owning the car but i get better tax write-off's.

Its actually quite funny my brother is a salesman for honda my brother often says my brother baught one recently. They go how old is he oh hes 20. The look on their faces he says is quite funny.

[jolt]

You would perhaps be surprised to know that even if you run your own business, then a novated lease can still offer you substantially more tax advantages than a chattel mortgage or corporate hire purchase.

Rod

[Nikoy]

i discussed it all with my accountant and in his professional opinion the chattle morgatge suited me best.