If you choose to purchase novated lease vehicles for tax benefits and other discounts, you need to make sure the vehicle is fully insured at all times.
Importance of Insurance
A novated lease can be a financially advantageous means of buying vehicles, but you need to ensure that you operate your lease in accordance with your provider’s terms. This includes taking out comprehensive motor vehicle insurance to safeguard your car against accidents, theft and more situations than are covered by standard third party insurance. The vehicle needs to be insured to its full insurable value, which employees undertaking novated lease schemes will usually be able to claim back as expenses.
How Insurance is Calculated
If you do not already have comprehensive car insurance for a previous vehicle, it will be necessary to take out the appropriate level of cover deemed necessary by your employer or other novated lease provider, and the cost of insurance will determine the amount that can be claimed back on expenses. You should also check with your provider what other expenses may be included in salary sacrifice packages, including car repairs and servicing and fuel costs, which may be paid as part of your novated lease and allow you to save on GST.
Buy or Lease a Car in Perth
Fleet Network operates novated leasing in Geraldton, Perth and Albany, with 20% taxable deductions offered to employees through their employers or sponsorship organisations. Call08 6555 3854 for more details about other features of salary packages, including insurance, roadside assistance and fuel cards.