Novated Car Leasing

[ladybird11]

DH and I are in the market to buy a new 'run about' car . We're just looking at a small 4 cyl as we juggle cars, kids and shift working and only need one large car.

So, has anyone got any feedback about novated leasing. I know all the good bits - but I want the low down i.e. when things go pear shaped stories. Surely they exist?

TIA!

[Little Chicken]

I had a novated lease and when I could afford it, it was great. Salary sacrificed the whole thing. It was wonderful.

But....

They will not let you renegotiate repayments if you fall behind or pay fortnightly if your contract says you must pay monthly.
There is generally a balloon payment at the end which if you can't afford or get a loan to cover they will take your car and sell it, and make you pay the shortfall OR they will say just give the car back and lease a new one (another 3 - 5 years of payments), OR just give the car back that they sell with no shortfall leaving you with nothing after 5 years of payments.

In hindsight I would go with a car loan as at least you can generally negotiate if circumstances change.

[~Hestia~]

We have leased 3 cars, mine being the latest. My DH is away camping unfortunately, if you can wait a couple of days I'm sure he could answer all your questions! My preggy brain can't remember anything ever going wrong though.

[ladybird11]

We're lucky to not have issues with pay cycles etc - being Government employees everything is regular like clock work thankfully.

Thanks CM, I can wait !

[~Hestia~]

Cool I'll PM you when he gets home. A new car will be very exciting though!

[ladybird11]

Considering the run about car we drive at the moment has no working a/c, no power steering let alone few safety features I'm excited - but I'm letting DH pick the car & colour as he's never had the excitement of buying a brand new car before, the large car we have is one I bought prior to meeting him....But yeah, we both drive the 'runabout' car just as much as each other - so there is a pinge of excitement...
Oh, I tell a lie - I had only one requirement - that the car isn't white .

[Little Chicken]

We're lucky to not have issues with pay cycles etc - being Government employees everything is regular like clock work thankfully.

Thanks CM, I can wait !

So was I but ended up on maternity leave and moving interstate and couldn't afford it anymore.

Anyway....

This might take longer but play a dealer off against the lease provider. My friend got a full tricked out rav 4 for a lot less then a friend of hers who works for toyota could get it with an employee discount by doing this.

[Trillian]

We haven't had any problems at all with ours, however things have been pretty cruisy. We've not been hit with any large repair bills (touch wood) and we've never had a service request rejected (which they tell you they can do if there are insufficient funds in your 'kitty') and having the fuel card to just go and get fuel without it eating into your household budget is fantastic too. But that said, we'd probably not do it again. Our Accountant thinks that we should keep doing it, but DH isn't keen as it would mean another 4 years with his employer and he doesn't know if he wants another 4 years with them kwim?

[ladybird11]

So was I but ended up on maternity leave and moving interstate and couldn't afford it anymore.

Anyway....

This might take longer but play a dealer off against the lease provider. My friend got a full tricked out rav 4 for a lot less then a friend of hers who works for toyota could get it with an employee discount by doing this.

Thats the part I don't understand.....Is it the lease companies job to source the car you want e.g. we say we want a blue Holden Barina, then they go off an find it - or do we locate the car and advise the lease company where we've found the car and they handle it from there??

[Trillian]

I think you can do it that way. I know of others through DH's work who have found their own car and gotten the leasing company to purchase it, but if they aren't happy with it, they wont do it. When we did ours, we picked which car we want and colour/accessories etc and then the leasing company got it from us from their dealer - which was Suttons of Homebush (NSW) because they are a dealer for nearly all the manufacturers. Then Suttons delivered it to us when it was ready.

[ladybird11]

Great - thanks Trill !

[Little Chicken]

My leasing company found it, but you can get them to come down on the price that they will quote you for it. Eg, the dealer will quote you x price for barina with this this and that accessory, take it to the company and see what they can do. They should match it at least. Then go back to the dealer etc etc. My friend did this with the leasing company and two dealers. Took a couple of weeks longer but she got exactly what she wanted at a great price.

I lived in perth at the time, and the leasing company bought my car from an albany dealership.

[ladybird11]

Great - thanks Muminalice !

[~Kim~]

I have a friend who wrote his car off in a prang, yes his fault, but you can't pick when and how you have an accident and the company hit him up for the rest of the cost of the new car because the insurance only covered the cost of the car, not the rest that you would pay for rego fuel atc, he had an enormous bill at the end.
I have also got friends who've been hit up massively at tax time because they haven't done the required amount of kms.
Saying that though we're seriously looking at it too.

[ladybird11]

Yes, I have a friend that chose the 25,000km option and every so often they have to go for looooong drives just to increase the km's. We calculated how many km's the car would travel so are going for a 15,000 km option to be safe.
Thanks for letting me know about the friend that crashed a leased car, definately a question I'll make sure DH asks when he speaks to them tomorrow.

[Trillian]

Leesa, if that is the case and you wont be doing a lot of Km's in the car, you have to look at what that will cost you in Fringe benefits tax if you don't do them. We have ours set for 25,000km per year (we do around 28-29000) but if we don't meet that target, we have to pay 11% FBT, and that amount gets higher for the less amount of KMs you nominate. So if you only nominate 15,000kms, but don't do them, you could be paying a lot more than 11% FBT. Each month you will receive a statement from the leasing company telling you what your KM's are etc and if you are on track to meet your target Kms. And another thing I forgot to say too was that when we got our car, it was all registered and insured for personal use, but this year the company realised they'd screwed up and we had to change over all the insurance and registration to business use - which is what it should have been registered as in the first place as technically DH's employer own the car. This added nearly $500 onto our yearly rego and insurance payments. So that is something you need to factor in each month as well. You may get the benefit of salary sacrificing and not paying as much tax, but it may not be for much gain if you are paying higher running costs overall kwim?

[Little Chicken]

In a way I am glad I don't lease anymore (even though I absolutely loved my car), because I know that I wouldn't get the KM's I needed to here. It was easy when I was doing a 70km round to work and back 5 times a fortnight plus other driving, but when DP's work is only 3 km's away, I wouldn't come close to reaching 15000km.

[ladybird11]

Thanks again ladies - we've calculated we'd easily get to 18,000kms yearly - so we'd go with 15,000km just to be safe .