Comparing Interest Rates
Novated Lease Interest Rates
WARNING: PLEASE DO NOT COMPARE NOVATED LEASE QUOTES ON THE DIFFERENCE IN INTEREST RATES ONLY.
Statewide strongly recommends that employees compare novated leases on a total cost basis over the full term of the lease. When a lease is assessed in total dollars and cents over the same period of time, this gives the true comparative cost of the novated lease. In addition, early termination costs, the lease term, the residual value, the real interest rate and GST should also be compared.
The construction of a novated lease with payments deferred, in advance or in arrears, residual value and disclosure of GST not only influences the lease payment but also the comparison interest rate applied.
Novated leases are a fixed interest rate agreement. If the lease is terminated before the due date, penalty clauses and break costs may be activated. To minimise the risk, Statewide recommends that the employee takes the lease over the shortest term that their budget and cash flow will allow.
It is not uncommon for a finance-provider to offer a lower interest rate in establishing a lease, and have high early termination costs that outweigh the benefit of a lower interest rate.
Statewide's professional, qualified and licensed staff are able to determine the lease structure and finance provider that is best suited to each employee's particular circumstances.
For more information on Maturing Novated Leases click here.