23rd February, 2024
Cars and their related costs are one of our biggest household expenses, yet many of us haven’t been exposed to the savings advantages that a novated lease can offer.
If you’re thinking about buying a new car or an EV (electric vehicle), you may be considering various finance options.
However, did you know that a novated lease is another way that you could get the car you want now, and could pay less on the vehicle price and ongoing running costs?
MYOB’s novated leasing is a car financing arrangement between the employer, employee and a lender, powered by Flare.
With MYOB’s novated leasing, you can get the car you want with no finance deposit, and bundle up all your vehicle finance and running costs like fuel and maintenance into one convenient payment.
When you, as an employee, decide on taking up a novated car lease plan after discussing with Flare, your employer will receive a trigger request via the MYOB platform from Flare to set-up novated leasing for you.
The Flare team will then arrange everything for you, from sourcing the car of your choice at a great price through their network and helping you secure finance, to buying your car and having it delivered.
Your employer makes salary deductions that are automated through salary packaging to pay for your car and running costs, helping to save money on tax.
Flare manages the arrangement with you and your employer. It’s that easy.
You don’t pay the car off in full over the term of the lease as there must be a ‘residual value’ amount left over at the end of the lease period. The amount unpaid is owed at the end of the lease.
This is determined using a methodology set out by the Australian Tax Office.
When you come to the end of your lease, you have plenty of options:
The employee can reduce their taxable income by making payments with pre-tax dollars, resulting in tax savings.
The employee has the flexibility to choose their car and select a lease term that works best for them.
The lease payments are automatically deducted from the employee’s salary, making it a hassle-free way to manage car payments.
If an employee changes jobs, they have the options to pay their car off in full or continue to pay the financier directly. They may be also able to take the lease with them, subject to their new employer’s approval.
MYOB’s integration with Flare’s novated leasing product automates 95% of the traditional admin required to set up a lease and service the deductions.
By automating deductions, MYOB Payroll customers won’t need to manage additional pay run items.
Flare’s process helps qualify an employee’s novated lease eligibility in advance of any formal commitments, and also helps facilitate agreements through a customer service specialist.
Eligible electric vehicles and plug-in hybrids are now exempt from the 47% FBT (fringe benefits tax) only if provided through a novated lease.
Additionally, Flare’s experts can help you benefit from the saving advantages of a novated lease while you help the planet.
When you go electric, you’ll save on fuel and maintenance compared to an internal combustion engine vehicle.
If your employer offers a novated lease arrangement, you may be able to get one.
Some eligibility rules apply:
Get in touch with Flare to discuss salary packaging with your employer and help them understand the benefits.
Flare’s friendly team will help you understand your options so you can take out a novated lease that suits your needs.
A typical cost breakdown might look something like this:
| Novated Lease (eligible EVs) | Novated (other vehicles) | |
|---|---|---|
| Vehicle driveaway price | $73,389 | $73,389 |
| GST savings on purchase price | $5,885 | $5,885 |
| Monthly payments (incl. running costs**) | $1,740 | $1,740 |
| Monthly tax and GST savings | $684 | $192 |
| Net cost per month | $1,056 | $1,548 |
| Total savings over 48 months | $38,592 | $14,976 |
Find out more about MYOB’s Novated Car Leasing today.
Get in touch or call 1300 480 096 or email to learn more.
* Flare comparison data between ICE Mazda CX5 vs. EV Tesla Model 3 on 48-month lease term, 15,000 kms pa.
** Monthly running costs include fuel, maintenance, insurance and servicing.
The above comparison is indicative and of a general nature only, and we have not taken your personal financial objectives, situation or needs into account. We recommend you consider if you need to seek professional financial advice before making any financial decisions regarding Flare Cars.