3 Ways Novated Leases Save You Money
Cars require several things to keep them running, both continually as well as in the long term. Looking after your vehicle day to day involves fuel, and they also need work occasionally in the form of servicing and repairs to retain their value. When your vehicle is on a Novated Lease, covering these expenses can be a little different compared to other types of vehicle finance. This article discusses how fuel and maintenance costs are covered with Novated Leases, and how you can manage and monitor these expenses.
Each Novated Lease provider uses their own method of fuel payments; however using fuel cards is a popular choice. With fuel cards, drivers are either given one card which works like a credit card and is accepted at many different fuel stations, or a range of oil company cards are supplied. Both systems essentially work the same way – instead of paying for fuel when you fill up, simply present the fuel card. The charges are then deducted directly from your Novated account, so you are not required to pay upfront for fuel expenses.
Maintenance, repairs & roadside
When dealing with vehicle maintenance, repairs & roadside, some companies use a reimbursement system whereby drivers pay for expenses upfront and are then reimbursed later by your Novated Lease provider. Other companies use a simpler system where no upfront payment is needed. When using an approved supplier, you simply need to tell them that you are with your Novated Lease Company, and they will contact the Novated Lease provider to verify your account. Your Novated Lease provider then arranges payment with the supplier and the payments are charged directly to your account.
Managing and monitoring expenses
While managing your vehicle expenses can seem overwhelming, if you’re lucky you will find a Novated Lease company that provides an online monitoring system. Accessing your account online through a portal allows you to quickly view a snapshot of your account and balance, and see a detailed cost breakdown including fuel, maintenance and repair costs. Being able to see each charge against your Novated account also allows you to see if your expenses are going according to your salary packaging schedule, and whether your account is in credit or debit.
Irrespective of anything you will always have vehicle expenses. The advantage of a Novated Lease is in many cases not having to pay these expenses up front and having them come from your pre-tax salary, which can ultimately save you tax. Novated Leases also allow you to stay in touch with expenses via online portals, rather than calculating this yourself from piles of receipts. Having a well maintained and fully managed Novated Lease will help you minimise these costs and use them to increase your disposable income.