MY MONEY

Ask Paul: Am I better off with a novated lease or a car loan?

2
Share on Facebook
Share on X
Share on LinkedIn

By

Published on

Q. I have been trying to do the sums to see if I would be better off getting a new vehicle through a novated lease or a personal loan.

Combined income is around $170,000pa net. - Therese

A. Hi Therese. It really depends on the income of the person who is buying the car and the value of the car.

car loan car lease novated lease should i get a loan or lease new car

Any of the novated lease companies can then run the numbers for you.

You can compare this with the repayment schedule on a personal loan and then you will have a black-and-white answer.

I suspect if you compare the novated lease with a really low-interest personal loan there will not be a lot of difference.

I reckon the real issue is the actual cost of the car.

The advice I have been giving for 40 years is "buy the cheapest car your ego can live with".

They are just money-devouring, depreciating disasters. Sure, we need one but the best advice I can give you is to buy a cheap, reliable one.

Get stories like this in our newsletters.

Related Stories

TAGS
,  , 
2
Share on Facebook
Share on X
Share on LinkedIn

Paul Clitheroe AM is the founder of Money and serves as the publication's editorial adviser. One of Australia's most trusted personal finance experts, Paul has spent decades helping Australians build wealth, manage debt and make smarter money decisions. He is widely known for host­ing the Money TV program and authoring best-selling personal finance books. Since launching Money in 1999, he has played a leading role in delivering practical, independent financial guidance to Australians. Paul is chair of InvestSMART Financial Services. He was the founding chair of Ecstra Foundation, a national not-for-profit focused on improving financial wellbeing, from 2018 to 2026, and led the Australian Government's Financial Literacy Board and Financial Literacy Australia from 2004 to 2019. In academia, Paul is chair in financial literacy at Macquarie University, where he is also a Professor in the School of Business and Economics. Ask Paul your money question. Due to volume, Paul cannot respond to questions posted in the comments section.
Comments
Ben
August 3, 2018 6.24am

Click bait with no answer (other than 'check for yourself').

Belinda
August 27, 2018 8.21pm

Best way to buy a car is to save up and pay cash for it.