Interest Rates
Comparing novated lease interest rates
Interest rates are an important factor in a Novated Lease however simply comparing interest rates does not provide the complete picture.
Statewide Novated Leasing strongly recommends that employees evaluate novated leases based on the total cost over the full term of the lease. Assessing a lease in total dollars and cents over the same period gives a true comparative cost.
Your Novated Lease Checklist
| What are your financier's early termination costs? | |
| Is the lease term suitable for your circumstances? | |
| What is the real interest rate applied? | |
| Is GST correctly accounted for? | |
| Are all of your included insurances necessary? | |
| Is the detailed budget realistic? |
To build your novated lease knowledge even further, check out our Knowledge Centre for more must-know questions.
In accordance with Queensland Government Policy, the structure of your novated lease will include a two month deferred lease payment, a residual value based on ATO legislation and full GST disclosure. Any adjustments made to these lease components can significantly influence the lease payments applied.
Early Termination
Novated leases are a fixed interest rate agreement. If the lease is terminated before the due date, penalty clauses and break costs may be activated. To minimise the risk, Statewide recommends that the employee takes the lease over the shortest term that their budget and cash flow will allow.
It is not uncommon for a finance-provider to offer a lower interest rate in establishing a lease, and have high early termination costs that outweigh the benefit of a lower interest rate.
Statewide's professional and experienced staffs are able to determine the lease structure and finance provider that is best suited to each employee's particular circumstances.
For more information on Maturing Novated Leases click here.