Novate Leasing: 13 Months Leasing Trick

DanielTr on 05/03/2024 - 21:18

Maybe it is no longer the secret that using 13 or 49 months novate leasing to optimise balloon payment (you pay lower balloon payment on shorter period). I've post mine here so that you could have a look and let me know where I could further reduce/ask/cut out from the quote: https://tinypic.host/image/D2aigd

"Vehicle Value $32,456
Lease Term (1.083Years)
Residual Value 56%
Running Costs - Fortnightly : $246 (fuel 146, insurance; 46; service: 23, registration 31)
Lease Payments - Fortnightly: $887
Managment fee: $11 (fornightly)
Finacial adviser fee: $9 (fornightly)
New take home pay: $1825 vs normally at $2600"

From the quote you could see most of the infor and yes, it is ICE car (certificed used car, Toyota Kluger 2019, 70k km). Driving distance and other information are in the quote. I see the quote is quite low for fuel (20k km/year) and insurance - i' may ask them to remove this.

I'm a bit concern about the lease payment. It seems ~$110 more than what I calculate. I can certainly pay in cash but prefer to keep in offset account. What do you think?

Automotive Novated Lease

Comments

  • Euphemistic on 05/03/2024 - 21:24
    +3

    So how is it a trick?

    • Gdsamp on 05/03/2024 - 21:33
      +2

      It's not a trick, it's an illusion…

      • jv on 06/03/2024 - 12:58
        +1

        I thought it was for balloons ?

    • star-ggg on 05/03/2024 - 23:00

      the trick is to make money disappear

    • CheapandUsed on 06/03/2024 - 08:20

      At 13 months you can claim 2 years of deductions/depreciation pay out the lease and get a new car (well it's 13 months old now) with some decent tax savings - allegedly.

      • Euphemistic on 06/03/2024 - 09:13

        Ok. I wondered if it was to do with rego being renewed before you end the lease, but youd be paying for that anyewy in the lease id imagine.

  • Aureus on 05/03/2024 - 21:28
    +3

    Just pay cash. It will be cheaper.

  • bloom on 05/03/2024 - 21:30
    +6

    Only novated lease trick is going electric so you don’t pay FBT

    • Trance N Dance on 05/03/2024 - 21:48

      Unless they're self-employed, isn't FBT irrelevant to the employee as the employer pays it?

      • djkelly69 on 05/03/2024 - 22:34
        +3

        Employer basically passes the amount of the FBT on to the employee.

  • Tee Rex Arms on 05/03/2024 - 21:38

    Would lease savings outweigh savings from keeping the money in offset?

  • Pcosmic on 05/03/2024 - 22:02
    +7

    Cash only. This leasing company needs profit to survive. You're the source.

  • pegaxs on 05/03/2024 - 22:29
    +6

    “This one easy leasing trick… leasing agents hate this one dirty trick… ask me how…”

    Then quotes a 5yo Prado with 70,000km on it.

    • Gunnar on 06/03/2024 - 01:30

      No it’s worse - it’s a Kluger

      • Mechz on 06/03/2024 - 12:11
        +1

        The car is fine, but paying that much for it and not owning it definitely is.

  • FoxJump on 05/03/2024 - 22:55
    +4

    a) Determine your actual interest rate paid. Compare finance payments and balloon payment and inquired interest rate into a balloon repayment calculator. This will reveal any hidden start up fees.
    b) don't pay the financial adviser fee. Why do you even need this?
    c) get a quote on self-insuring, not their insurance. Ensure agreed value is greater than (887 + 11 + 9)26 + 324560.56*1.1
    d) you get more "win" on a new car. sure you pay more, but the car manufacturer may do fleet pricing, you save on actual gst - whreas here on your NVL youre paying gst on top of inflated dealer second hand prices. You're better off buying second hand private in this case i think, without an NVL.

    EV is more beneficial

  • DanielTr on 05/03/2024 - 23:04
    -2

    Yes. I tend to agree to most of the points here. From my calculation the interest here is north of 20% and it is not worth it, really. And I think most of car finance honey moon rate is >6% atm, more than the home loan. So I would rather take money out of the offset and pay outright.

    Slightly off-topic: Is it worth to buy Toyota certified used car? Sure, for <10k car, one can buy any where. But is it safer (?) to pay extra $ to get a year of manufacturer warranty from the certified used car? Any experience to share would be appreciate.

    • avoidfullprice on 06/03/2024 - 07:12

      While is neat you remind us having additional one month term brings the residual value to the next tier thus the trick, the rest of the post has been more or less a clickbait to “rate your quote”, let alone “slightly off topic “ discuss Toyota certified car. I suggest you change your topic title to discuss this instead

    • sumyungguy on 06/03/2024 - 10:37

      Best to shop around for used car warranties. One extra year seems a bit mean. I purchased a used VW, came with a 10-year warranty with minimal exclusions (would have covered expensive stuff like aircon compressor, water pump, oxygen sensor) with the only caveat being the car had to go back to the selling (Mazda) dealer for annual preventative maintenance. Sadly we moved away and this became too hard.

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