The Basics Of A Novated Lease
Most employers around the world, at least in developed countries with plenty of money to go around, offer two primary forms of compensation:
- Financial – Typically takes the form of wages, salaries, bonuses, etc.
- Nonfinancial – These are usually benefits packages, including compensatory rewards like health insurance, paid time off, and novated leases.
Australia, one of many countries with citizens typically offered opportunities at a novated lease, is unique in the sense its employers are the most common sources of the novated lease in today’s world.
What Is A Novated Lease?
First off, a Stratton Finance Novated Lease is an agreement in which something is loaned from the owner, or lessor, to the renter, or lessee. When it comes to vehicles, lease agreements typically have set mile limits and other strict terms, at the end of which vehicles are returned to their lessors.
A novated lease is a deal in which an employer uses its financial wherewithal to command the lease of a vehicle in an employee’s name. The term “novated” means, more or less, the employer is the party that secures the lease agreement, then passes it on – or “novates” – it to an employee.
Why Employees Enjoy Their Novated Lease Agreements
Not every employee seeks out a novated lease. Some people even go for a Car Finance Stratton Toyota Finance – purchasing is often a better option – though those interested in leasing vehicles will almost always opt for a novated lease.
Vehicle maintenance, insurance premiums, and fuel are all included in lease repayments, and taken directly out of wages and salary that employees are compensated with. Because it’s taken out before taxes are, vehicles leased are effectively cheaper than if employees decided to lease vehicles on their own.
Unlike other benefits, namely health insurance, novated lease agreements can readily be transferred from one employer to another, and even end up in the hands of those employees signed to one.
When employers agree to take responsibilities for their workers’ novated lease plans, such responsibilities only last as long as their employees’ employment terms.
Employers also tend to offer highly attractive benefits alongside their novated lease agreements, the most popular of which are roadside assistance plans and fees associated with purchasing the vehicle in question.
Workers get benefits that other leases don’t always offer, in terms of modifying their vehicles, as long as they increase the value of vehicles in question. They can by safety packs that include accessories and aftermarket parts that beef up driver safety, as well as window tinting.