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Why Novated Leasing Isn’t the Best Choice for Your Next SUV

Why Novated Leasing Isn’t the Best Choice for Your Next SUV

SUVs are an increasingly popular choice for Australians of every lifestyle. From busy parents with growing families to adventuring couples looking for room for everything the road throws at them, they’re the go anywhere, do anything car. 

But that huge versatility often comes with a huge price tag to match. SUVs are not cheap, with even basic models clearing $30,000 in sticker price. With costs this high, it’s a small wonder that many drivers are turning to novated leases to help them get behind the wheel of a brand new SUV. 

At Carbar, we want to help you drive the way that suits you. While novated leases are a popular choice for drivers looking for a more flexible way to drive, they’re not the only option on the table. Make an informed decision and learn why leasing an SUV isn’t the best choice for everyone. 

What are the downsides of leasing an SUV? 

Under a novated lease, you get access to the car of your choice for weekly or monthly fee, similar to a rental. This weekly or monthly fee is paid for by your employer out of your salary package – effectively using your pre-tax income to pay for the lease. This requires a commitment to a minimum period, normally three or more years. 

While the idea of using your pre-tax income to pay for your car sounds great, it’s not without its downsides. Being a form of salary packaging, novated leasing requires the cooperation of your employer, and you can’t be certain that you won’t change jobs in the next 36 months. Without an employer’s cooperation, you could find yourself responsible for the lease obligations, putting you even further out of pocket. 

Additionally, the use of salary sacrifice can complicate your tax return at the end of each year, making an otherwise simple PAYG return just that bit more complex. Finally, the fees for a novated lease can be higher compared to other options. With many leases charging weekly fees of at least $200, you might be losing money even after factoring in the tax benefits. 

What are my alternatives? 

If you can see yourself behind the wheel of an SUV, don’t get stuck in a multi-year lease on your way to getting the keys. Novated leases are inflexible, expensive and can be difficult to manage if you change jobs – exactly what you don’t need when looking for an alternative to outright ownership. 

Carbar is taking car subscription to the next level, helping organisations of all sizes keep moving without the high cost of ownership. With Carbar, you can get behind the wheel of a late-model SUV for as little as $139 a week, inclusive of insurance, registration, roadside assistance and servicing. Offering a range of vehicles from sought-after manufacturers including Jeep, Land Rover, Jaguar, and Mercedes, you’re sure to find something to love in our garage. 

Carbar offers a free service for businesses, allowing them to provide subsidised subscription 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. 

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