Novated Lease

Why choose a novated lease over other regular car finance products?

  1. Tax Savings – save considerable amounts on income tax by paying for your vehicles finance and running expenses pre-tax through your employer
  2. Best Price Guarantee – when purchasing a brand new vehicle, we guarantee that you will get the best price through our dedicated network of dealers
  3. Fuel card savings – you get access to a Motor Pass Card that you can use at 93% of all petrol stations in Australia, you can also use this to pay for your servicing and tires and you are entitled to discounts and certain service provider

 

Who is entitled to a Novated Lease

  1. Any full time employee under a PAYG Income tax structure
  2. Employees who work for companies who have a salary packaging a novated lease offering

 

What is a balloon payment or a residual balance?

A residual value or balloon payment is a balance that remains at the end of the term.  There are options regarding your residual balance/balloon.

  1. Payout the balloon where the final payment includes GST
  2. Refinance the balloon and continue leasing the vehicle taking advantage of further tax savings
  3. Sell the car privately or trade it in and upgrade your car – be aware that if you cannot obtain the figure remaining at the end via sale of vehicle you must pay the difference – if you sell the car for more than the residual/balloon you pocket the difference tax free

The below table outlines residual guidelines by the ATO

Lease Term Minimum Residual
12 Months 65.63%
24 Months 56.25%
36 Months 46.88%
48 Months 37.50%
60 Months 28.13%

Can I choose my own car?

There can be restrictions on the type of vehicle however most vehicles are suitable.  The restrictions set by the Australia Taxation Office are on utility vehicles than have a carrying capacity of more than 1 tonne.  Your employer may also restrict certain vehicles such as those classed as luxury cars.  You can choose new or used and even lease a car that you already own.

 

Can I purchase privately owned used cars?

Yes, there are a couple of steps that we take to ensure the vehicle is legitimate and check to see that the funds for the vehicle go to the right people/finance company

 

Do I have to find the car myself?

When you purchase a new we can assist with the order to ensure that you don’t get caught up in any dealer contracts.  We take care of all the negotiations to ensure you get the best price guaranteed on brand new cars.

 

What is Fringe Benefits Tax?

Fringe benefits tax is a tax paid on certain benefits you provide to employees. FBT is separate from income tax and is based on the taxable value of the various fringe benefits you provide.

Under this method, the taxable value of the car fringe benefit is a percentage of the car’s cost price and is calculated using the following formula:

((A x B x C) – E) / D

Where:
A = the base value of the car
B = the statutory percentage
C = the number of days in the FBT year when the car was used or available for private use of employees
D = the number of days in the FBT year
E = the employee contribution

The greater the total distance the car travels (business and private), the lower the taxable value.

Statutory Percentage
The statutory percentage depends on the total kilometres the car travels, as follows:

Total kilometres travelled during the FBT year Statutory Percentage Existing Contracts
Existing Contracts From 10/05/2011 From 01/04/2012 From 01/04/2013 From 01/04/2014
Less than 15,000 kms 26% 20% 20% 20% 20%
15,000 to 24,999 kms 20% 20% 20% 20% 20%
25,000 to 40,000 kms 11% 14% 17% 20% 20%
Over 40,000 kms 7% 10% 13% 17% 20%

 

 

How do I pay for my vehicles expenses?

LAMB Finance invoice your employer and/or salary packaging company in order to collect funds from your pre-tax salary to pay for your vehicles finance and running expenses.  LAMB Finance will forward your repayment to the financier.  LAMB Finance hold your running expenses budgets in a Novated Lease Expenses Account.  You will receive a monthly statement showing your budgets vs your actual spend and any surplus/shortfall.  You use your LAMB Finance Motorpass card to pay for petrol, servicing and tires.  Just forward your registration and insurance renewal to our fleet team for them to pay it on your behalf.  Please be aware that keeping the vehicle registered and insured is your responsibility.

 

Can I make changes to my budgets?

Yes, and unlike the big salary packaging and novated lease companies we do not charge you to make amendments.  You can contact our fleet department from 8a.m to 8p.m 7 days a week to make changes to your budgets or alternately email the fleet department.

 

What happens if I do not spend the money in the account?

The surplus in your Novated Lease Expenses Account can be claimed back at any given time by requesting funds be returned back to your employer.  This will happen naturally at the end of your lease once we have completed your accounts reconciliation.

 

What happens if I leave my employer?

If you change employer, you can transfer your lease agreement to your new employer so they take on the responsibility to make payments out of your pre-tax salary.

If you leave your employer and do not move into a new job you can simple take the lease with you and make regular monthly payments via direct debit from your bank account.  You can make the finance repayments and manage the expenses yourself.  As soon as you move into a new role you can setup your novated lease at your new employer.

 

Insurance

Do I have to get my own Insurance?

Whatever finance you use to purchase your next vehicle you can get a competitive insurance quote from LAMB Finance or source your own insurance.  The Insurance must be full comprehensive.

 

How do I pay for the insurance if I go through LAMB Finance?

Your first year insurance can be included in the amount financed or you can pay using any regular payment options such as direct debit, credit card or statement

 

 

Regular Car Loans

What are the fees and charges?

LAMB Finance believe in transparency and are happy to disclose all fees and charges included in your finance contract.

 

Can I purchase any car?

As we have up to 6 financiers they all have different criteria regarding age of vehicles.  However, brand new, used and private vehicles are all accepted.  You can even purchase a vehicle from an auction.

 

What documents do I need for the approval and settlement?

As regular car loans are regulated by ASIC there is a strict procedure regarding quoting, application and settlement.  Please contact LAMB Finance to speak about the requirements.

 

 

Commercial Car Finance – Chattel Mortgage, Finance Lease and Commercial Hire Purchase

How much business use do I require to be eligible for Commercial car finance?

Unless you are financing the vehicle in a company name the minimum business use is 50%.  This must be verified by your employer or accountant.

 

What are the benefits of commercial car finance?

There are several benefits associated with commercial car finance such as GST claims, financing the vehicles drive away price less GST and business use tax claims.  They are also the most common finance types used by sole traders, partnerships and companies.

 

Are there any restrictions on vehicle types?

There are no restrictions other than the usual age restrictions some financiers may impose.  All utilities, commercial vans, trucks are all accepted.

 

 

LAMB Finance Fleet Management

What is LAMB Finance Fleet Management?

It is a convenient way to manage your vehicles running expenses.  We can estimate budgets based on your driving habits or alternatively you can set the budgets.  You will get a LAMB Finance Motor Pass Card that you use to purchase petrol, servicing and tires.  You are also entitled to discounts through certain service providers.  Registration and Insurance renewal notices must be forwarded so we can pay it on your behalf out of your expenses account.  It is a great way to budget your vehicles yearly expenses avoiding getting caught out having to pay a year rego upfront.

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