A Guide to

Novated Leases www.sgfleet.com

Improve the

Weekly Budget A holiday, new clothes or just a bit more money in the wallet; whatever the reason, everyone should consider the potential improvements a Novated Lease can make to any weekly budget. It’s as easy as calling sgfleet and taking out a Novated Lease on a motor vehicle. sgfleet may even be able to buy a driver’s current vehicle and lease it back. The information contained in this brochure will give a basic introduction to an sgfleet Novated Lease.

What is a Novated Lease? A Novated Lease is simply an arrangement between an employee, their employer and sgfleet that will help a driver to save money on their next vehicle purchase. A Novated Lease can allow a driver to save money on their personal motor vehicle and operate it in a tax and cost-effective manner. This is called a salary packaging arrangement.

There are many benefits to this style of arrangement, from potential income tax savings, through to registration, insurance, fuel and maintenance all being net of GST, plus access to sgfleet’s vehicle fleet discounts. Any vehicle can be chosen that suits each individual’s

lifestyle and budget, from a sedan or wagon, or even a 4WD or sports coupe.

In addition to purchasing a brand new vehicle, used vehicles can also be leased which includes sgfleet’s selection of quality ex-lease vehicles. The current selection can be viewed at www.sgfleet.com.

Because individual financial situations differ, sgfleet has designed a calculator, available at www.sgfleet.com, in order to allow individuals to better understand the savings that are available. Or alternatively, one of the friendly Novated Sales Consultants at sgfleet can be contacted to discuss the best possible solution.

“...sgfleet has designed a calculator available at www.sgfleet.com in order to allow individuals to better understand the savings that are available.”

SaLary PackagINg (weekly)

Net Income $1,200.00

Mortgage / Rent $500.00

Car Loan $0.00

Food $250.00

Bills $150.00

Living $220.00

Fuel $0.00

Car Running Costs $0.00

Total Expenses $1,120.00

Balance $80.00

NON-SaLary PackagINg (weekly)

Net Income $1,400.00

Mortgage / Rent $500.00

Car Loan $160.00

Food $250.00

Bills $150.00

Living $220.00

Fuel $50.00

Car Running Costs $100.00

Total Expenses $1,430.00

Balance $-30.00

sgfleet is a global fleet management

company with over 25 years’ experience

and offers expert knowledge, great

savings and superior service on a full suite

of Fleet Management Services.

From a range of salary packaging options

and Novated Leases for individuals to

corporate leases for fleets, sgfleet can

tailor a solution for every need.

Turn the weekly budget from this...

...into this! SaLary PackagINg (weekly)

Net Income $1,200.00

Mortgage / Rent $500.00

Car Loan $0.00

Food $250.00

Bills $150.00

Living $220.00

Fuel $0.00

Car Running Costs $0.00

Total Expenses $1,120.00

Balance $80.00

NON-SaLary PackagINg (weekly)

Net Income $1,400.00

Mortgage / Rent $500.00

Car Loan $160.00

Food $250.00

Bills $150.00

Living $220.00

Fuel $50.00

Car Running Costs $100.00

Total Expenses $1,430.00

Balance $-30.00

Optional inclusions and their benefit:

Comprehensive InsuranceComprehensive insurance can be included in the monthly rental of a Novated Lease with premiums fixed for the life of the lease. The financial benefit is that insurance premiums are paid from pre-tax salary, ensuring tax savings. Another benefit of the specifically tailored comprehensive insurance offering is that in the event of total loss, the greater of

market value or lease payout is paid, ensuring no concern about potential gap payments.

LeaseguardLeaseGuard provides cover to drive a Novated Lease vehicle with confidence and peace of mind. In the event of involuntary termination or retrenchment, LeaseGuard will cover monthly finance payments on the vehicle for a period of unemployment (limits apply), whilst still allowing the vehicle to be driven. Contact sgfleet for more details.

What’s Included in a Novated Lease?

Simplicity for the driver is the aim, so most vehicle related expenses can be included in an sgfleet Novated Lease.

SaLary PackagINg INcLuSIONS

One fixed payment in line with the payroll cycle, for the life of the lease

Vehicle purchase, including direct delivery and a full tank of fuel

Maintenance in line with the manufacturer’s log book*

Fuel card to purchase fuel for a nominated number of kilometres*

Replacement tyres included up to an agreed number or budget*

Registration and CTP costs included

Comprehensive Insurance

Roadside Assistance*

Optional payment protection in the case of illness or unemployment

Extensive range of vehicle accessories*

* Paid with pre-tax salary, net of GST

Extended WarrantyIf a driver is considering keeping the vehicle at lease expiry and wants the benefits of an extended warranty program, then an sgfleet consultant can be contacted to discuss including an extended warranty program within the lease. Payments will be made from tax-free dollars, so the financial benefit will be received from day one. This program is fully transferable and worth considering even if the driver plans on selling the vehicle at lease end.

Roadside Assistance The Roadside Assistance Service ensures that drivers won’t be left stranded and offers drivers immediate assistance in case of the unexpected. The Roadside Assistance Service will assist from a simple jump start to minor mechanical repairs 24/7, 365 days a year, anywhere in Australia.

Benefits ofNovated Leases FinancialA portion of the vehicle finance and running costs are paid using pre-tax dollars, potentially providing income tax savings. Vehicles may be financed net of GST and additional savings can also be achieved through sgfleet’s purchasing power.

FlexibilityA Novated Lease gives the flexibility to choose almost any vehicle, new or used, including an ex-lease vehicle from sgfleet. The term of the lease can be chosen as well as any extras to the vehicle, including window tinting and DVD players that are paid with pre-tax dollars.

ConvenienceConvenience is everything, so sgfleet have included an easy payment option that is managed by sgfleet and the employer, and includes the vehicle running costs like maintenance, fuel, insurance and registration. Hassle-free budgeting can be enjoyed with the costs known in advance, with the lease payments fixed for the term of the arrangement.

case Study #1Charlotte is the Operations Manager at a national organisation and earns $195,000 per annum before tax. Charlotte requires a large car and will travel 40,000 kilometres per annum. She has selected a 4x4 valued at $56,000 on a 4-year lease term. In the below example, Charlotte is over $175 per week or $36,000 over the 4 year term better off under a salary packaging arrangement rather than purchasing the vehicle outright with post-tax dollars.

case Studiessgfleet understands that everyone’s financial and personal

situations are different and have provided these two case

studies to demonstrate the importance of sgfleet understanding

each person’s position before providing a firm quote. To find

out the potential savings available under a salary packaging

agreement, call sgfleet on 1800 743 262.

The salary sacrifice amount and after tax contributions are approximate only and are calculated based on the cost of finance as at August 2014. Running costs included in the comparison are maintenance, initial and annual registration, comprehensive insurance, roadside assistance, up to 4 replacement tyres and a monthly provision for fuel. Please also refer to the disclaimer on the back page.

case Study #2 Daniel is a full-time worker, new to the workforce. He earns $45,000 per annum and is looking to lease a vehicle with a drive away price of $14,420. He travels just over 20,000 kilometres per annum and is looking for a 4-year lease term. In the below example, Daniel is over $55 per week better off under a salary packaging arrangement than purchasing the vehicle outright with post-tax dollars.

Salary Packaging Outright Purchase

Gross Salary $195,000 $195,000

Less Salary Sacrifice $15,530 $0

Taxable Income $179,470 $195,000

Tax on Taxable Income $57,940 $65,497

After Tax Contribution $10,675 $27,758

Net Income $110,855 $101,745

Weekly Net Income $2,131.83 $1,956.63

Salary Packaging Outright Purchase

Gross Salary $45,000 $45,000

Less Salary Sacrifice $6,708 $0

Taxable Income $38,292 $45,000

Tax on Taxable Income $4,758 $7,072

After Tax Contribution $2,800 $10,179

Net Income $30,734 $27,096

Weekly Net Income $591.04 $533.63

Novated Lease

FaQsQ. Is Novated Leasing for everyone?

Novated Leases are beneficial for about 85% of people who drive a car. The three variables which affect the savings that can be gained from a Novated Lease are:

• Income

• The cost of the car

• How many kilometres per year are driven

An sgfleet consultant can be contacted to obtain a quote to gain a better idea of how much can be saved under a Novated Lease arrangement.

Q. Is there a limit on the type of vehicle that can be Novated?

One of the benefits of Novated Leasing is that there are generally few restrictions on the type of cars that can be novated. Novated Leases are typically used for personal cars (as opposed to company cars), so it is generally up to the employee to choose their own car.

Vehicles over 1 tonne in payload carry certain conditions and motorbikes cannot be financed under a Novated Lease agreement. In addition, some employers may put restrictions on the types of cars that can be purchased under a Novated Lease.

Q. can a Novated Lease be obtained on a used car?Yes. In addition to new vehicles, Novated Leasing is available for used vehicles, or even a driver’s existing vehicle.

sgfleet also has a selection of premium ex-lease cars. These vehicles are of excellent quality and in most cases, only 2 to 4 years old and have been regularly serviced and maintained. To see the selection of cars available visit www.sgfleet.com.

Conditions do apply around the age, type of vehicle and number of kilometres on used vehicles. For more information contact one of sgfleet’s consultants.

Q. Does the car need to be used for business to save tax?

No, the vehicle does not need to be used for business purposes to save tax under a Novated Lease arrangement. In fact, generally Novated Leases are used for vehicles with mainly private usage.

Q. What is Fringe Benefits Tax?

Fringe Benefit Tax (FBT) is a Federal Government tax imposed on employers on the value of certain fringe benefits that have been provided to employees in respect of their employment. The FBT year runs from 1 April to the following 31 March. sgfleet makes FBT calculations simple with a range of easy to use solutions including online calculators.

Want to Know More?sgfleet believe in the consultative approach and prefer to talk to you, answer any questions you may have and ensure you totally understand this Novated Lease solution.

For more information on Novated Leases and to find out exactly how much can be saved, call one of the sgfleet Sales consultants now on 1800 743 262.

1300 138 235 www.sgfleet.com

sgfleet does not purport to offer legal, financial or taxation advice. Employers and employees should seek independent advice as to the implications of a Novated Lease transaction. The salary packaging amounts and take home pay calculations set out are estimates only. While due care is exercised by sgfleet to ensure integrity of the estimates it does not make any warranties, express or implied as to its accuracy or completeness. Note that the amount of any FBT actually paid by the employer is not within the control of sgfleet and is dependent on a number of factors, including the characterisation by the employer of the type of benefit received by the employee and the actual level of usage by the employee of the motor vehicle for both private and business purposes. Employees should ascertain from the employer how it intends calculating the amount of any FBT which it will pay in relation to the benefit provided in connection with the proposed lease. Based upon that information, the amounts of the provisions set out in this brochure may need to be varied. Full terms and conditions are available on request.