NOVATED LEASE ALTERNATIVES

At Pacific Auto Finance, we pride ourselves on ensuring our customers receive the best advice combined with the most suitable product to suit their needs. We assess each situation on an individual basis, and will give you a variety of solutions for your circumstances. We are experienced and honest and have our customers’ best interests at heart so you can feel secure knowing you get the best product, at the best rate.

A novated lease agreement may not be the best solution for you and if this is the case, our team will take you through a variety of other options we offer.

STANDARD CAR LOAN

An application is made directly from the purchaser to the financier. Repayments are made on a regular basis and the vehicle is usually used as security for the loan. You must be able to meet the repayments, and you will have to take our comprehensive insurance on the loan, so make sure to factor that into your budget.

Benefits:

  • Finance can incorporate on road costs for the vehicle
  • Interest rates are lower if the vehicle is used as security
  • Monthly repayments are usually fixed ensuring easy budgeting
  • Terms range from 12 months to 7 years offering flexibility in repayments.

COMMERCIAL HIRE PURCHASE

This product is available for individuals as well as businesses. The financier pays for the full cost of the vehicle and hires it to the purchaser. You’ll own the vehicle at the end of the loan and can sell it or upgrade.

Benefits:

  • Terms ranging from 24 months to five years
  • A deposit can be made to reduce the size of the loan
  • Tax deductions if the vehicle meets the business use requirements
  • Lower interest rates as the loan is usually secured
  • No GST on repayments

FINANCE LEASE

This type of loan will benefit you if you use a vehicle primarily for business purposes. Simply put, the lender buys the car and leases it to the purchaser. Be aware that if you use this type of finance, you will be responsible for all maintenance and servicing costs and take on any residual value risk at the end of the loan term. The good news is that you can choose to refinance, sell or return the car at the end of the lease term. If you’ve grown attached to the car, you can also choose to purchase the vehicle for the residual amount.

Benefits:

  •  Little to no immediate financial outlay
  •  Lease payments are usually tax deductable
  •  Fixed monthly payments
  •  Access to lower interest rates as the vehicle is used as security
  •  Lease repayments can be made from pre-tax income

OPERATING LEASE

Different to a finance lease, an operating lease means you only pay for the use of the car for the time you lease it. At the end, you walk away accounting for fair wear and tear and ensuring you’re under the kilometre allowance. This is usually a short term lease arrangement and if you like to upgrade their vehicle on a regular basis then this type of finance could be perfect for you.

Benefits:

  •  Less risk associated with other types of leases as the financier retains residual value risks
  •  Repayments remain fixed over the term of the loan
  •  Repayments are usually tax deductable
  •  Potential tax benefits for employers as this type of lease is typically not listed on balance sheets

CHATTEL MORTGAGE

Similar to a mortgage on property, the financier will typically lend you the funds to buy the vehicle of your choice. An upfront deposit or trade-in can be made to reduce the total of the loan, therefore reducing your regular repayments.
Keep in mind, if you don’t meet the repayments the car can be repossessed. The good news? Using a car as security gives you access to lower interest rates.

Benefits:

  •  Purchaser has ownership of vehicle
  •  Flexibility in regards to capital outlay and options for balloon payments throughout the term
  •  Repayments can be exempt from GST
  • Interest and depreciation on the vehicle can be used as tax deductions
  • Interest rates can be lower as the financier uses the mortgage as security

To decide on which loan option is most suitable for you, contact one of our qualified car finance consultants today. Call us or fill out an online enquiry form and we will get back to you.