Want to Lease Your Next Car? Here are Your Options

While many people wish to buy a car of their own, sometimes it’s better for them to just lease it instead. This is especially true for people with limited income or small business owners who just can’t make the money to pay for a new car in full. If you wish to lease your next car, you have at least two leasing options to choose from.

Your first choice is a novated lease. Your employer will lease a vehicle and pay for it on your behalf by deducting a certain amount of money from your pre-tax salary. While this lease is likely to include operating costs (like registration costs), it may also attract “fringe benefits tax,” a figure determined by the value of the car and the distance travelled while driving it. Novated leases can be quite useful, though, since they still reduce your taxable income.

Your second choice is an operating lease, which basically involves renting the car for a long time and giving it back once the term is over. An operating lease may or may not be maintained with a monthly payment, which is why it’s quite popular among people who wish to drive expensive vehicles without having to pay much. If you choose this option, keep in mind that you won’t gain any equity from your car and any residual risk on it lies with your finance company.

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