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If you are not familiar with a novated lease, now is a good time to find out more. Novated leases are becoming more popular as a method of vehicle financing. A novated lease combines a number of features of traditional car financing so as to provide you with some attractive benefits. A novated lease is a three way agreement between the financier, you, and your employer, where the obligation to make the lease payments lies with the employer.

With a novated car lease you own the vehicle and have the right to take the vehicle with you if you should change jobs. There is often tax advantages with this method of financing. Novated leases are flexible, and they are calculated based on the amount borrowed, interest rate, term, and residual or balloon payment.

Benefits for you the employee of a novated lease include:

• More flexible with the type of car

• Payments can be made with pre-tax dollars which can be a huge benefit especially in the higher tax brackets

• Have the option to own the vehicle when the term is up or start a new lease on a new vehicle

• You can lease more than one vehicle If you haven’t previously explored a novated lease and you think it might be something for you, why not take some time to find out more about what it has to offer and whether it is right for you. You should also discuss with your employer whether they would be interested in such a lease.

Most employers are game, although occasionally an employer will not want to participate. Novated leases are becoming more popular but they are still the one of the least used options out there. It won’t be long before this well kept secret is in use by many more employers, employees, and financial institutions.