Multiple ownership policies
Novated leasing is often only part of a multi-faceted vehicle policy. Effective policies can end up comprising a number of the following ownership options.
- Novated leasing
Provides a vehicle of choice to virtually every employee in the business, reduces organisational tax, and employees’ income tax.
- Company owned
Useful for tool-of-trade vehicles and when heavy branding is required. Although it provides an organisation with great control, it does tie up a lot of company capital, and requires significant internal management.
- Company leased
As above, useful in some situations, involves less company capital to begin with, however the business is now tied into inflexible lease agreements.
- Car allowances
Significantly less liability and financial exposure for the business compared to company owned or leased. Can be complicated to administer however, when employee tax withholding forms, fuel cards, business and personal use are all taken into consideration.
The different options above all serve a purpose, and are useful for different specific vehicle and business requirements. What’s critical in policy setting, is not only getting the mix right, but also ensuring that the balance is correct.
Car allowance & novated leasing
Providing employees with a car allowance, and the option to novate their vehicles is best practice policy for certain types of companies. Where there are large numbers of sales people out on the road, for example, it can be a winning approach.
Company owned & novated leasing
Mining companies often require specific tool-of-trade vehicles for the remote areas and unique conditions that they operate under. Company owned vehicles are common in this type of situation, where the business has servicing and maintenance capabilities. Combining this with a novated lease offering, allows employees to access tax benefits on their personal vehicles too.
Once your new policy has been determined, we’ll help you introduce the change to your employees.
If your workforce has been used to company cars for example, making the move over to novated leasing can be tricky if it’s not handled correctly. We’ll ensure that whatever your new policy is, the transition is smooth and pain free.
Click here to discover just how much your business can benefit from an effective vehicle salary packaging program.