I have been considering getting an EV on a novated lease through Maxxia for 5 years.
We are looking at the Tesla Model 3 , maybe the base one.
My salary is 120K and the estimated out of pocket repayments fortnightly is $580.
I enquired about the interest rates and it is 14%.
Is this a normal thing ? this seems really high for me
Has anyone done a loan from a different bank as I think this is possible?,
thanks
I just checked. It's 6 million. Stop exaggerating please.
If I have told you once, I've told you a million times, stop exaggerating.
Yes it's normal with these lease companies. They seem to think they're entitled to a large chunk of your tax savings and pray on people who don't source their own financing/insurance etc.
Thanks, can you recommend any other financing company that can be used for novated leases?
Yes, but my fee for doing so is ~75% of what you'll save.
You need to ask your payroll/HR as to which leasing company they will work with. In general, it's locked to the one your employer has chosen.
If you can choose, shop around. Get lots of quotes for car only (no insurance, maintenance, fuel, etc.) so you can make a like-for-like comparison. If your company is in bed with Maxxia then you may be SoL, but I'd still complain to my employer.
14% is ridiculous, let alone on a five year lease.
Numbers wouldn't really calc on a $120k income.
there's this amazing thing called a search function…
$120k income shouldn't be leasing a $70k car imho.
And you'll find 14% is excessive but all leasing companies will be similar, it's a rort that takes taxpayer dollars and lines their pockets with them.
it's a rort that takes taxpayer dollars and lines their pockets with them.
Yep… As soon as the government announces any rebates or cash back or incentive schemes… It's amazing how the price goes up exactly the same amount as the government incentive scheme is offering…
You're not suggesting that builders might increase the price of the new home by about the same amount that the first home owner grant might be…? I'm shocked…
My recent lease was on 9.3% or something. At five years it was about 9.8% comparison rate (I back calculated it) and at 2 years it was closer to 12% comparison. I asked them directly about it but they maintained that the IR was always the 9.34% number.
I don't think it's crazy for someone earning 120k to buy a model 3… They aren't 70k anymore, more like 60k and then you get the GST savings with novated lease, so like 54k~.
I do agree that the high interest rates are a scam though and definitely eat into any potential savings.
Unless you can offset that interest in other means, ie convenience, suitability, etc anything approaching or over the 10% GST saving is very hard to take on board!
Have you spoken to a financial advisor? A 5Y lease is ultimately very expensive.
I will contact a financial advisor next week. Thanks for the advice
Would you pay an interest of 14%? Pre-tax or not?
Actually, if what you are saying is correct,
$580 x 26 fortnights x 5 years = $75,400 against a car that is worth $67,421 (Base 3). A premium of 12% OVER 5 YEARS (Appx 2.5% per year implicit interest).
Doesn't sound bad if you ask me especially if it is FBT free.
Of course, I don't believe it because I am with Maxxia too and my implicit interest rate is > 20% the last time I checked.
NB: OP didn't mention balloon so that adds to my suspicion.
The balloon is $19475
dont forget to include cost of EV-themed personal plates
Best to do the lease 1 year at a time.
First year you'll need to pay more due to depreciation, however if your circumstances change it allows greater flexibility as you are not committed for 5 years.
If you break these leases you need to pay the full amount of interest for the entire term.
Also the interest rate will likely drop over the next few years.
My salary is 120K and the estimated out of pocket repayments fortnightly is $580.
I enquired about the interest rates and it is 14%.
Is that $580 just car repayments? What is the balloon repayment? What is the insurance/costs looking like? What monthly/annual fees do they charge you (I have $360 a year on top of everything else just as processing fees).
My EV novated lease made sense when I didn't have a car and had to buy one, it was 9% interest and I'm on a higher salary (and I bought the much cheaper Atto 3 and got a $3k rebate), and even then it came down to a lot of fuel savings to really make the difference (I charge at home/work for free). I really doubt it makes sense for you. Also remember to take into account that stage 3 tax cuts are coming, although that's only 2.5%.
thanks for the advice
The residual is $19475.
The admin fees are $180 a year. The $580 includes all the running cost.
So $95,775 (incl 5 yr x $180 admin fees and balloon) on a $67,421 car mean 42% premium over 5 years (Appx 8% per annum pre tax)
Almost the same as getting RACV green loan after tax but of course, excluding rego etc etc.
Not good but not bad. Others can opine probably?
Don't worry about the interest rate. These are what need to care about:
580 fortnightly seems high for a M3 for a 5 yr lease unless you're talking in pretax figures. You shouldn't care about the pre-tax figures when comparing with other options. You should only care about post-tax figures because all other options are post-tax.
$580 is the estimated out of pocket every fortnight for the tesla 3 rwd. Govt job and will most likely be working in the same sector for 10 years at least
Commbank is 6.99% for my EV car loan, taken out 3 days ago.
If only there were 8 million other ev novated lease threads that you could have looked at.