Although most people believe that employees benefit the most by opting for leased cars, the truth is that employer’s also benefit significantly by opting for lease contracts such as Novated contracts. Listed below are some of the important employer’s benefits of Novated Lease agreements.
The primary benefit of opting for a hired car is that the employer does not have to add vehicles to the company car’s fleet which means that he can save a lot of money. In addition, by hiring a vehicle employers do not have to hire a fleet manager to take care of company vehicles, which ensures that employer’s can save additional resources. Another important benefit of hiring cars is that the employer can attract good candidates for employees, by offering an attractive salary package that includes car incentives without increasing any actual cost to the company. This in turn helps employees save money on GST and Fringe Benefit tax which ensures that employees can save money as well.
By opting for novated lease agreements, the employer can offer his employees attractive cars of their choice to use which in turn ensures that employees remain happy. This can reduce attrition rates and other work related problems that may arise due to unhappy employees. Employers, who opt for Novated agreements, do not have to worry about maintenance of cars and damage to cars since they will not be held responsible in case there are any problems with the hired car. The only responsibility of the employer if he opts for a lease agreement is to pay the car company every month for the hired car. This amount is deducted from the employee’s pre-tax salary income and does not come out of the employer’s pocket.
In comparison to company cars, hired cars that are taken on lease agreements are off the balance sheet which is beneficial for employers. Employers should note that if they decide to opt for a significant number of hired cars from a company then they may be offered discounts, deals and other offers in addition to low cost hired cars. Employers may also be offered the option to transfer the lease agreement to another employee if the previous employee leaves the company or if he does not want to hired car. The terms of Novated lease portability depend on a few factors and the terms of the car company.
In addition to the employer’s benefits of Novated Lease mentioned above, companies that offer novated lease contracts, try to give the employer the new car within 2 working days and they also offer personalized service to help both employers and employees. Many companies that offer lease agreements also offer car insurance, road side assist services and other features to people who opt for fully maintained Novated lease agreements.