Like most Australians, you do not use your vehicle for work, therefore you have no legal way of claiming a tax benefit for your vehicle, except, via a Novated Lease arrangement.
A Novated Lease is designed especially for people who have no, or very little, business use. It provides large ongoing tax savings and GST savings on the vehicle purchase and ongoing running costs for the life of the lease.
For most employees, the savings achievable by running a vehicle as a Novated Lease is equivalent to getting and instant pay rise of around $3,000 to $6,000 PER ANNUM.
Here is a guide to how much income tax you could expect to save each year, based on a $30,000 vehicle travelling just 15,000 kilometres per annum:
There is a common misperception that Novated Leasing is mainly used by high paid executives.
The reality is, Novated Leasing is beneficial to high and lower income earners and in fact, it is mainly used by lower paid employees, who are smart enough to recognise the savings and motivated enough to stretch their pay as far as possible.
Novated Leasing is regulated by the Australian Taxation Office and enjoyed by many hard working Australians.
Did you know one of the biggest users of Novated Leasing are government employees? In fact the ATO offers Novated Leasing to its own employees as a great employment benefit.
A Novated Lease can be entered into for a new car, demonstrator and most used cars are even ok. It may even be possible to lease back your current vehicle. What would you do with the extra cash?!