Novated Lease for a Used Car
One of the most commonly asked questions when it comes to novated leasing is whether a novated lease can be applied to used cars, as well as to new cars. Well, the good news is yes it can.
If you want to lease a car and you’re not sure you can afford a brand new one (or you don’t want a brand new one) don’t be deterred from taking out a novated lease. A novated lease is entirely possible with a second hand car and can have just as many benefits as leasing as brand new vehicle.
If you’re buying the car directly from a dealer the process will be almost exactly the same. You are permitted to purchase the car from either a dealer or a private seller. However, it’s worth noting that if you’re buying the car privately, you won’t be able to claim the GST as the seller won’t be registered for GST.
1. The car cannot be older than 10 years by the end of the lease. So if the car you are purchasing is 8 years old, you can only lease it with a novated lease for a couple of years at the most. This age criteria might vary, for example if you are purchasing a luxury vehicle, so be sure to double check before you get too excited.
2. If you’re planning a trade in, this price cannot be taken off the purchase price. Of course you’re entirely free to speak with a car dealer and work out a deal to have this trade-in take place as a separate transaction.
3. Do your research. As always, it’s a good idea to look into things as closely as you can. If you’ve chosen out a specific car, jump online and see what other people have to say about it. Check for things like common problems. You don’t want to purchase a car that’s going to give you a lot of grief or be unreliable. Also organise some mechanical checks to make sure the car is in good working order. If you can get your hands on service history this will be a great way to see what you can expect from the car and also give you an indication of when certain parts have been replaced. As part of this research, you should also check the car’s history by running a check through your State’s registry. This will help you determine whether the car has been involved in any accidents.
4. Sort out the paperwork. Make sure you understand the paperwork procedures involved and act accordingly. You don’t want to be paying for your mistakes or simple oversights.
When buying a second hand car, you need to be extra vigilant to make sure you’re not purchasing a car that is going to cause you more trouble than it’s worth. Conduct as much research as you can and avoid jumping into a rushed purchase.
For further information or to get started on organising your novated lease, contact us today.