Novated leasing is the newest and most popular way for employees to get a new car. This type of financing method is a very attractive way to create a positive employer-employee relationship. Several companies have used this scheme to attract several employees to work in their companies. Employers offer their employees a renewed lease to provide company cars that they can drive for work or personal use.
A novated car lease is the use of a motor vehicle for a fixed period of time at an agreed amount of money that is stipulated in the lease. This contract is a tripartite agreement between the employee, the employer, and the leasing company. A novado car lease has been a very inexpensive way for businesses to provide vehicles to their businesses.
Entering into a lease for a refurbished car is extremely cheaper than owning and maintaining a fleet of company cars. However, on the employee side this can have advantages and disadvantages. Before deciding to enter into a lease, it is important for any employee to examine and weigh their personal circumstances, financial capacity, and preferences. If you are interested in entering into a renewed lease with your recent employer, here are some of the advantages and disadvantages of a renewed car lease:
ADVANTAGE:
• Easy qualifications and requirements.
• Renting a car requires a low down payment. No need for a large initial cash outlay.
• Lower monthly lease payments than auto loans.
• You can take pride in driving a new car with the latest modern comfort and safety features.
• You can drive a new car every 2 to 3 years, depending on your lease.
• You can drive a car that is always up to date and under warranty.
• Frees you from regular car repairs and maintenance.
• The cost of ownership can be deducted from your salary.
• You can have the advantage of choosing the type of vehicle you want to drive.
• If you leave the company before the lease ends, you can still take the car and sign a new lease with your new employer.
• You don’t have to worry about the future value of the car.
DISADVANTAGES:
• You do not have a property title.
• There is no car at the end of the renewed lease.
• Your car has a mileage limit, if it exceeds, certain charges will apply.
• It is not allowed to make modifications to the car.
• Leasing companies dictate the amount of wear and tear on the vehicle. At the end of the contract, each car will be evaluated for wear and tear if the degree of wear exceeds the considerable amount, you will have to pay for it.
• Your monthly payments do not go toward car ownership.
So if you are interested in maintaining a three-way contract with your employer for a new vehicle, make sure that a renewed car rental is the best option for you. A novado lease is different from the traditional financing method, it is best to acquire the basic ins and outs of a novado car lease yourself to make a well-informed and practical decision.