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Leasing a car


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#1 Jane Doe

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Posted 11 July 2012 - 08:39 AM

Hubby and I are on the hunt for a new family car, and tossing up whether to just get a loan for it, or go with a fully maintained novated lease through his work.

I just wrote a long a convoluted post using examples etc, but I'm basically wanting to know if anyone has found leasing a vehicle to NOT be worthwhile / cost effective.

I've got all the facts and figures, and think I've got my head around it (as much as I can with my mushy brain atm) but something is just not sitting right. It could be that we've never had a lease before, and I'm just a bit nervous blink.gif

Any info would be greatly appreciated!
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#2 bluenomi

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Posted 11 July 2012 - 08:46 AM

I don't lease but friends of mine found getting the number of km required was hard. One year they drove to Queensland (from Canberra) and back up to get enough km on the car before the end of the year!
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#3 Avery

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Posted 11 July 2012 - 09:17 AM

QUOTE(bluenomi @ Jul 11 2012, 08:46 AM) View Post

I don't lease but friends of mine found getting the number of km required was hard. One year they drove to Queensland (from Canberra) and back up to get enough km on the car before the end of the year!


My husband is looking into a lease plan car at the moment and I think the rules for the km requred has changed a little bit.

I'll be watching this thread with interest. Ive always owned outright any car Ive had, so leasing is a new deal for me, and at first glance it seems quite expensive
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#4 Thelma

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Posted 11 July 2012 - 12:21 PM

From what I understand from what my DH has tried to explain to me, is that leasing usually works out better if you're planning on upgrading your car regularly (ie, every 2-3 years)

My DH's ute is a chattel loan (I think that's what it is?) and he has a balloon amount (which I think you can nominate the amount) at the end which he would need to pay out should he decide to keep the car. However he does massive kilometres for work and upgrades every 3 years or so. He works for himself so he is able to claim interest on loan repayments, fuel, car related costs etc. Along with the fact that he's paying a lower monthly repayment because of the balloon amount, it works out more cost effective for him to do this type of loan rather than an outright buy or regular loan.

Again, I'm not sure on the accuracy of this information as I do sometimes tend to glaze over a little when it gets explained to me tongue.gif But probably best to speak to your accountant about the best way to go as different loans mean different things for claiming on tax.

#5 *Tash*

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Posted 11 July 2012 - 04:01 PM

I'm 4 years into a 5 year novated lease. It has worked out to be very convenient, but I don't know whether it has *really* been worth it financially. I think if I was going to upgrade to a new lease next July, it would be better, but as I will be going to part time, we are going to pay out the residual, which comes to ~$6000, on a 2006 camry with high KMs. My fortnightly income has been reduced by around $350 for the last 4 years...

The rules have recently changed, and I don't really know the specifics (regarding kms and fringe benefit tax) - probably best to ask an accountant for an answer more relevant to you.
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#6 squeaza

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Posted 11 July 2012 - 06:19 PM

I think it's worth working out exactly what your per year depreciation would be on a car that you would buy, plus the ownership costs.

We're in the category that a lease wouldn't work for at all, because we have a 15K car that we plan on keeping for more than 8 years. At less than 2K of depreciation a year and only about 20K kms a year, the figures just don't add up. Once you get a more expensive vehicle, higher mileage etc suddenly it becomes so much more favorable as you keep on paying the same and at some point you have a new car again!

There are other consultations of course - I like owning stuff outright if I can - firstly it's an asset that can be sold if times get tough, but also I worry about having money owing if things go pear-shaped with work/health.
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#7 Kerala

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Posted 11 July 2012 - 10:20 PM

QUOTE(Avery @ Jul 11 2012, 09:17 AM) View Post

My husband is looking into a lease plan car at the moment and I think the rules for the km requred has changed a little bit.



Agree aparently it has changed alot re the kms and is not longer an issue for people.
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#8 davemcgoldrick88

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Posted 30 July 2012 - 10:58 AM

QUOTE(Kerala @ Jul 11 2012, 10:20 PM) View Post

Agree aparently it has changed alot re the kms and is not longer an issue for people.


Me and my wife recently took out a novated lease agreement with Fleetpartners. We moved from the UK to Melbourne and weren't really sure about the best options available to us when we were looking to buy a car. In the UK we had a company car and we paid the tax and the car as payments. Over here it seemed to be slightly different as we had never heard the term novated lease before.

Anyway, if anyone's deciding on whether or not to take out an agreement then you should use their lease calculator. Worth a look and it's pretty good with regards to making an informed decision.

Cheers
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#9 alexlhh

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Posted 01 June 2013 - 11:56 AM

Thanks DMC for bringing up this novated lease for me, which is really helpful. it is definitely a good way to get a new car without having a lot of cash, but i still have one question: will this lease stuff be beneficial to everyone? no matter which salary range we are in?




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