There are a lot of companies today that offer novated leasing for cars, either as a way to reward top performers, or as a recruitment incentive. What salesperson, account manager or lawyer doesn’t want to drive around in a BMW?
While it may tempt some employees, opinions on novated leasing are changing. With a minimum three-year commitment, it’s often seen as an inflexible option that traps businesses in expensive weekly payments. That’s why Carbar has developed an alternative. Keep your employees happy and reduce your expenses in one with our car subscription service.
How Does Novated Leasing Work?
A novated lease allows a business to take money directly from an employees’ salary to make payments for a vehicle. These payments are generally taken from an employees’ pre-tax earnings, making it a more attractive option than taking out a car loan.
But this can be a big commitment for your business. According to the ATO, under a novated lease agreement, the employer takes over all or part of the lessee’s rights and obligations under the lease. Furthermore, as a result of changes issued in document AASB 16 by the Australian Accounting Standards Board in February 2016, businesses have to record the ongoing and future costs of leasing agreements on their balance sheets.
Given a novated lease comes with a minimum three-year term, this effectively increases the visible debt for your business, changing your debt-to-equity ratio, and potentially leading to tax implications and difficulties in obtaining capital.
What about a BMW Subscription from Carbar?
Rather than locking your employees into a complex lease agreement – and committing to years on your business’ balance sheets – why not offer them a car subscription service instead?
You can give them unrestricted access to that very same BMW they had their eye on, at a fraction of the cost. This means if they were to leave your company, it’s simply a matter of cancelling the subscription. We only need two weeks’ notice, which is often the same length of notice an employee needs to provide too!
Best of all, Carbar offers the freedom to upgrade whenever your employees want (simply give us that two weeks’ notice). Over the BMW? Why not switch to an Audi?
Minimise Your Accountant’s Headaches
While novated leasing clearly has its negatives, it offers a convenient and predictable way for employees to manage their vehicle payments. But there’s more than one way to offer that peace of mind. A car subscription is just as simple and easy to budget for and manage, all the while offering the same benefits they would otherwise receive from a novated lease agreement. No lengthy commitment for them, and no bookkeeping headache for you and your accountant. The perfect way for your employees to start driving a BMW!
Start Rewarding Your Employees with a BMW Subscription from Carbar
We’re the better alternative to car ownership. Ditch your novated BMW leasing packages and switch to a modern subscription model that your employees will appreciate.
Carbar is taking car subscription to the next level, helping organisations of all sizes keep moving without the high cost of ownership. We’re proud to offer a free service for businesses, allowing them to provide subsidised subscriptions to incentivise employees, attract talent and set themselves apart from the market.
Staff can save up to 20% on subscription fees, swap or stop as they need and trade in their current car for cash. Register your business today and discover a new way to drive.