Case Study 1
John is an IT Contractor and earns $110,000 per year before tax. John is interested in leasing a new safe family car through PayMe Drive and estimates he will travel 20,000 kilometres per year. John would like a fully maintained lease for 3 years, which includes all the vehicle running costs and is interested to know more about the savings available through leasing as opposed to purchasing by car yard finance or bank loan.
The following table shows that John would have $120 a week and $6,213 a year more cash in hand under a salary packaged novated lease through PayMe Drive than he would if he simply purchased the vehicle outright or by a loan.
|Less salary packaged running costs
||No tax savings if purchased normally
|Taxable Salary after salary packaging
||Higher taxable income if purchased normally
||$2,800 more tax paid if purchased normally
|Annual Cash in Hand
||$6,213 more cash in hand annually
|Weekly Cash in Hand
||$120 more cash in hand weekly
Case Study 2
Jess is an IT contractor earning $95,000 a year, she is looking for a new car for Christmas and her budget is around $40,000. She has heard about the benefits of novated leasing and is interested in the cost difference between a personal loan and finance only novated lease.
If Jess were to take out a $40,000 personal loan over a three year term with an interest rate of 5% her repayments would be $268 a week
If Jess elected to source her new car through PayMe Drive and salary package the finance over a three year term her repayments would be $134 a week
Jess would be saving $134 a week and over $6000 a year through a finance only novated lease compared to a personal loan.