How Does a Novated Lease Extension Work ?

drsmithy on 13/11/2023 - 15:19

This is your weekly NL question…

We leased a Tiguan Allspace for two years, and have just gotten a quote to extend another 12 or 24 months.

Per the original lease, the FBT Base Value was $58,500. Residual is $34,500 (this is inc. GST right - ie : what I'd pay ?). After tax payments are currently $1,523.

The 1yr lease extension quote I have also shows an FBT Base Value of $58,500. Residual is now $22,600. "Estimated" payments are $1,440.

The question I have is shouldn't the Base Value be reduced to the ex-GST residual from the previous lease and everything recalculated from that ?

In the bigger picture I'm trying to decide whether to pay the lease out, sell the car (seems like I should be able to get ~$40k for it) and lease a new PHEV (have a 3yr quote for a Sorento, pay the lease out and keep the car until some better EV options are available, or re-lease for another year or two until some better EV options are available.

(Leasing org is Fleet Plus if that matters at all.)

Automotive Novated Lease

Comments

  • freefall101 on 13/11/2023 - 15:33
    +1

    What happened when you called Fleet Plus and asked them this?

    They know your tax situation, the valuations and everything else, it feels like picking up the phone would quickly answer your questions.

  • Gdsamp on 13/11/2023 - 15:58
    +1

    previous insights https://www.ozbargain.com.au/node/543498

    • drsmithy on 13/11/2023 - 22:41

      Thanks.

  • geekcohen on 13/11/2023 - 16:00

    seems like I should be able to get ~$40k for it

    Only a $6k ish profit and that is a big if on the $40k.

    • Drakesy on 13/11/2023 - 16:15

      Yep and the covid prices are dropping rapidly by the day. My car's used price dropped about 15% in 2 months

    • drsmithy on 13/11/2023 - 22:40

      Fair call.

  • MrThing on 13/11/2023 - 17:04

    high jack - is novated leasing even still worth it these days?

    • drsmithy on 13/11/2023 - 22:39

      I spent some time researching before we leased this car (because we had the cash to buy it outright, and it was the first time we'd ever leased a car) and eventually concluded that ultimately the lease would cost basically the same as buying outright (+ fuel, maintenance, etc over the relevant period) but by leasing we could leave the cash parked in our offset account.

    • Jake D on 14/11/2023 - 10:17

      Never has been

  • avoidfullprice on 13/11/2023 - 18:18
    +1

    shouldn't the Base Value be reduced to the ex-GST residual from the previous lease and everything recalculated from that ?

    That what i expected initially, but turns out ATO rules dictate residual is based on original base cost.

  • brad1-8tsi on 15/11/2023 - 11:42

    When I did my Novated Lease I did 2+2+1 and it basically rolled over the finance and extended the contract. That's how it appeared from my side. Pretty simple.

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