A novated lease agreement is a motor vehicle lease that has been duly and substantially renovated. The contractual obligations implied by the contract have been transferred from one party to the other. It should be remembered that the term ‘novation’ is used here not for some new creation but refers to something old being renewed. It is how leases are renewed. Under a novated lease, you are allowed to drive away after paying the whole rental amount in advance. However, this does not mean that you would not increase your credit limits or reduce your monthly payments as long as you abide by the contract terms.
There are many ways in which you can benefit from signing a novated lease. You can use the extra money you get for anything you want, such as paying for the deposit on your car, taking long road trips, or going out of town on vacation. Another great advantage of a novated lease deal is that there are no income tax benefits associated with it. It means that the interest on the loan will be lower than purchasing their vehicle while you are leasing the car.
If you opt for a novated leasing, you can always go for another car after your current one expires. It allows you to own two vehicles simultaneously, provided you fulfil the terms and conditions imposed by the leasing company. You may also sell your car after your contract has expired. You do not have to worry about the tax benefits and can opt for another new vehicle instead. It gives you the chance to buy the car you like at the right price.
There are different ways you can find the lowest possible interest rates, vehicle costs, monthly payments, and more. You need to explore the other options available so that you can choose the best deal. Suppose you decide to take up a novated lease deal. In that case, you should look at all the factors determining your payment, including the interest, the residual amount, and other penalties that the leasing company might impose. Find out how much money you can save, whether or not you will have to pay taxes, and other advantages and benefits before signing up for any agreement.
The novated lease agreement usually allows flexible leasing payment terms and a more extended period to repay the contract. The flexible payment options mean you can permanently settle your monthly obligations without worrying about how much you can afford. When you get a new job, your new employer will check for your outstanding dues. The novation finance company will take over this responsibility and collect the money from your next paycheck of employment.
If you lease a vehicle, you can negotiate on different Tyre sizes, more powerful engines, and different suspension options. The novated lease will cover all your repair and replacement costs, as well as your vehicle maintenance, which includes regular tune-ups and tyre replacement. Make sure you compare all available tyre options with the finalised vehicle specifications of your potential new employer to make sure you get the right tyres for your running costs.