Here is another novated lease question. More popcorn for everyone. Apologies for formatting - still new to this.
I’ve read the comments from last forum (https://www.ozbargain.com.au/node/497372); my situation is a little different am I’m just trying to see if I am missing anything from my calculation.
• Upgrading from small used hatchback (2012 Fiesta) as bub is on the way in Dec
• Pretty much set on the HRV VTI-LX (for the boot and rear cabin size, and the wife wants all the bells and whistles inc leather seats)
• Have considered all other compact SUVs (C-HR, CX3, XV, ASX, Selltos, Kona)
• Larger SUVs (aka RAV4) will be too big for the streets in my area (inner west Syd)
• Have looked at the used car market; not many still in warranty (pregnant wife wants peace of mind); most 2017 models (HRV VTI-L) are ~28-30K.
• Income: 93K (exc super)
• Mileage: 5,000 km per year
I am currently comparing 1) cash upfront and 2) novated lease.
Option 1) Cash upfront
• I have more than sufficient funds in my mortgage offset to pay for car in full.
• Total cost over 2 years = $45,460.
• Car purchased with cash = $38,000 (RRP driveaway $38,990)
• Running costs = $4,800 over two years
• Interest paid after taking $38K out of mortgage offset (@3.5%) = $2,660 over 2 yrs
Option 2) Novated lease
• Total cost over 2 years = $42,558.
• Lease cost = $427 per fortnight x 26 fortnights/yr x 2 years = $22,204
• Includes running costs for maintenance, tyres, rego/CTP, insurance (self arranged), fuel at $4,800 over 2 years (same assumptions above)
• Residual value/Balloon = $20,354
• The intention is to pay the balloon at the end of 2 years and keep the car
• The quoted interest rate was 7.5% (but I don't see how this affects the calculations if I am using fortnightly repayments cost)
• My job is quite stable, and I don’t see myself changing jobs in 2 years
Option 3) Finance
• Quoted by Honda at $170/week for 5 years, zero balloon.
• Total cost over 5 years: $44,200 (exc running costs) for $38,000 car. Therefore not considering it.
Am I missing something in my calculation?