Break the Affordability Barrier with EquiLease
Over 60% of employees cannot access the benefits of a novated lease, because of affordability, such as mortgages or the cost of raising a young family. With EquiLease, all employees can now novate a car they already own, irrespective of its age and importantly, irrespective of affordability.
How does EquiLease work?
With EquiLease, employees use a sale and leaseback to turn their existing vehicle into a novated lease, irrespective of age and retain equity in the lease. With over 60% of vehicles being too old to novate, EquiLease gives employees the ability to access the benefits of a novated lease and save thousands. There is no longer a requirement to buy a new or near new car to access the savings of a novated lease.
Enhance your attraction and retention strategies with EquiLease.
Why use EquiLease?
With EquiLease you open novated leasing to your entire employment base and give more people access to tax savings and fleet discounts that were previously not available to them.
Frequently Asked Questions
To turn the car into a novated lease, we buy your car from you and then lease it back to you. This allows you to pay for some of the car’s running costs using your pre tax salary. Because we sell the car back to your right away, the car remains registered in your name.
We use Car Sales data to determine what the market value would be, using a retail and wholesale price. If your car is in a good condition, the value will naturally increase.
To fund the estimated running costs per month, we deduct funds from you each pay day. We inform your employer of the amounts to be deducted from your pre-tax and post tax-pay. The funds are credited to your fleet management account. We issue you with a fuel and maintenance card linked to your fleet account, to pay for all expenses on your vehicle and allow you access to exclusive fleet discounts. Any unspent funds in your expense account, remain yours to use for future expenses.
You can terminate the lease at any time, after paying an early termination penalty of;
- 3 Post tax rental payments in year 1;
- 2 Post tax rental payments in year 2;
- 1 Post tax rental payment in year 3.
In most cases, the annual tax saving will be more than the penalty in month 3 of the rental – putting you ahead, even of you cancel the EquiLease.
We buy your car from you, but we do not pay the cash to you upfront. Instead, we pay you the purchase price over the term of the lease. Because there is no credit risk, there is no requirement for affordability and your car can be of any age. We called it EquiLease, because you have equity in your lease.
The running cost estimate is based on manufacturer specifications and the usage per year. As they are estimates only, they can be varied as usage changes. We can prepare a quote based on kilometres per year with a lease term varying between 3 years and 5 years.
At the end of the lease, we owe each other the residual, which we offset and you retain your vehicle, having saved thousands in tax each year.
EquiLease is an ATO approved Novated Lease and you can see the ruling here. With it, we can turn your personal vehicle into a Novated Lease, allowing you to pay for some of the running costs pre-tax.