It’s almost Christmas. For some people, it may be the most wonderful time of the year. Have you decided on what to buy for yourself this year? Why not get a car and welcome the new year with a new vehicle in your garage.
If you’re an employee and the company you work for offers novated leasing, then this may be the perfect opportunity. Before you whip out your novated lease calculator, here’s a primer on the various ways you could fund your new car.
Getting a car loan is the most basic option for most people. It involves a financial institution lending you money, which you will have to pay back eventually. Depending on your situation and your budget, lenders will think of the best option for you.
Another way to fund your new ride is through mortgage redrawing, which entails making extra repayments towards an existing loan. You can redraw this at a later stage and use it to pay for a car. Quite handy, yes?
A popular option for employees in Australia is getting a novated lease. It’s a way of purchasing a car through salary packaging. This means that your employer pays for your car through your pre-tax earnings. A novated lease is something your employer can offer without harming their business. This enables companies to offer leased cars, as well as tax benefits, as part of salary packaging, and this is applicable to both new and old employees. Plus, employers don’t have to worry if you choose to leave the company because a novated lease counts as neither an asset nor a liability of the company.
These three ways to finance your car serve as motivation for you, and it will also entice more people to join your company. Eyeing that car in your nearest dealership? Ask your employer if you are up for a novated lease and what the conditions are, so you’ll know the limitations of your next purchase.