How does Novated Leasing work?
Novated leasing is one of those terms that can make people switch off a little bit, but it's actually a pretty simple concept when you break it down.
We arrange (with your employer) for your cars expenses to come directly from your pre-tax salary, essentially giving you a discount on all car related costs, and leaving you with significantly more disposable income every week.
This used to just be something offered as a company perk to employees at fancy big firms, but Clear Lease makes it available to (almost) everyone.
We arrange (with your employer) for your cars expenses to come directly from your pre-tax salary, essentially giving you a discount on all car related costs, and leaving you with significantly more disposable income every week.
This used to just be something offered as a company perk to employees at fancy big firms, but Clear Lease makes it available to (almost) everyone.
Same Car. Almost Half the Cost.
Novated Lease on the 2024 Mitsubishi Eclipse
Assuming you get paid $110,000/year, you'd normally get paid $1,614/week after tax.
By bundling the Eclipse finance and ongoing costs into a Novated Lease, you be left with $1,422.32/week.
Making the real cost to you $192.07/week.
By bundling the Eclipse finance and ongoing costs into a Novated Lease, you be left with $1,422.32/week.
Making the real cost to you $192.07/week.
See the full price breakdown
Novated Leasing an Eclipse is
$311.37/week, taken before you're taxed.
This comprises of:
Finance: $206.02
Fuel, Insurance, Tyres, Maintenance & Servicing, Cleaning, Registration: $105.35
The Lease is paid for before your income gets taxed, in this case your taxable income is reduced by $16,191.24 (the annual lease payment). So: Taxable Income: $93,808.76
When we look at that by week:
Weekly Taxable Income (Lease cost already taken out): $1,803.63
- Weekly Tax: $410
= Take home pay: $1,422.32
In this scenario, we'd cut $91/week from your tax, add back your employer paid GST of $28.32/week, and discount the car through the FBT exemption, and the
real weekly cost is $192.07.
$311.37/week, taken before you're taxed.
This comprises of:
Finance: $206.02
Fuel, Insurance, Tyres, Maintenance & Servicing, Cleaning, Registration: $105.35
The Lease is paid for before your income gets taxed, in this case your taxable income is reduced by $16,191.24 (the annual lease payment). So: Taxable Income: $93,808.76
When we look at that by week:
Weekly Taxable Income (Lease cost already taken out): $1,803.63
- Weekly Tax: $410
= Take home pay: $1,422.32
In this scenario, we'd cut $91/week from your tax, add back your employer paid GST of $28.32/week, and discount the car through the FBT exemption, and the
real weekly cost is $192.07.
What's the catch?
We're not afraid to tell you the main thing that scares people off with novated leases, that's the balloon payment. It sounds a bit ominous, but it's really not as scary as it sounds.
The balloon is simply the remaining value of the car at the end of the lease term - the amount you'd need to pay if you decided to keep the car. In this example (the Eclipse), you'd have a residual fee of $14,705.38 at the end.
The beauty of it though, is you have options; you can also choose to sell the car, trade it in for a new one, or even enter a new novated lease. The key is to plan ahead and decide what works best for your situation. And at Clear Lease, we're big on transparency (hence the 'Clear' in the name), and are here to help you understand these options, even if that means a Lease isn't the right thing for you.
We're not afraid to tell you the main thing that scares people off with novated leases, that's the balloon payment. It sounds a bit ominous, but it's really not as scary as it sounds.
The balloon is simply the remaining value of the car at the end of the lease term - the amount you'd need to pay if you decided to keep the car. In this example (the Eclipse), you'd have a residual fee of $14,705.38 at the end.
The beauty of it though, is you have options; you can also choose to sell the car, trade it in for a new one, or even enter a new novated lease. The key is to plan ahead and decide what works best for your situation. And at Clear Lease, we're big on transparency (hence the 'Clear' in the name), and are here to help you understand these options, even if that means a Lease isn't the right thing for you.
Standard Loan (7.5%) on the 2024 Mitsubishi Eclipse
Assuming you get paid $110,000/year, you'd normally get paid $1,614/week after tax.
Getting the Eclipse with a Loan and paying for ongoing costs normally, you'd be left with $1,243.68/week.
Making the real cost to you $370.35/week.
Getting the Eclipse with a Loan and paying for ongoing costs normally, you'd be left with $1,243.68/week.
Making the real cost to you $370.35/week.
See the full price breakdown
Running an Eclipse through a Loan is
$370.35/week, taken after you're taxed.
This comprises of:
Finance: $265
Fuel, Insurance, Tyres, Maintenance & Servicing, Cleaning, Registration: $105.35
The Loan is paid for after your income has been taxed, so your taxable income is just your income:
Taxable Income: $110000
When we look at that by week:
Weekly Taxable Income: $2115
- Weekly Tax: $501
- Loan + ongoing costs: $370.32
= Take home pay: $1,243.68
By paying for your Eclipse after tax without salary packaging, your spending almost double the
real weekly cost, of $370.35.
$370.35/week, taken after you're taxed.
This comprises of:
Finance: $265
Fuel, Insurance, Tyres, Maintenance & Servicing, Cleaning, Registration: $105.35
The Loan is paid for after your income has been taxed, so your taxable income is just your income:
Taxable Income: $110000
When we look at that by week:
Weekly Taxable Income: $2115
- Weekly Tax: $501
- Loan + ongoing costs: $370.32
= Take home pay: $1,243.68
By paying for your Eclipse after tax without salary packaging, your spending almost double the
real weekly cost, of $370.35.
What's the catch?
Car loans feel comfortable because they're generally well understood, but just know you'll pay about double for that feeling of 'ease'. On the Eclipse, you've just paid $46,345 more for the exact same car.
With the Lease, even if you decide to keep the car at the end and pay the residual balloon payment, that'd only be $14,705.38, so with the Loan option, you're still paying $31,639.62 more.
Car loans feel comfortable because they're generally well understood, but just know you'll pay about double for that feeling of 'ease'. On the Eclipse, you've just paid $46,345 more for the exact same car.
With the Lease, even if you decide to keep the car at the end and pay the residual balloon payment, that'd only be $14,705.38, so with the Loan option, you're still paying $31,639.62 more.