We are now at the beginning of a new financial year and why not use this time to ensure that your car is financed in the most tax effective way. A novated lease is a tax effective way of financing your vehicle. Many employers provide this method of financing to their employees in an endeavour to help them reduce tax. By providing employees with such opportunities it helps emloyers to attract new staff and retain their existing staff.

A novated lease is a method of financing a vehicle from your pre-tax income. This ultimately reduces your tax and effectively increases your take home pay. Many employers allow you to also finance your partner’s vehicle from your pre-tax income by way of a novated lease. A fully maintained novated lease is whereby the car repayments as well as the running costs of the vehicle are deducted from your pre-tax income. The running costs of a vehicle include fuel, tyres, servicing, registration and insurance.