Most business owners acquire
vehicles for work-related purposes. On some occasions, however, at
least one employee may need a vehicle for his/her duties and for use
off-hours. Companies may provide senior personnel with a vehicle
under the individual’s compensation package. This requires taking
out one through a novated car leasing programme.
What are novated leases?
Novated auto leases are
special financing arrangements between a lender, the employer, and
the employee who gets the vehicle. The object is to help the
employee, through his/her employer, find a vehicle that best suits
his/her needs. The amount to be paid every month will be deducted
from the employee’s salary, together with his/her other monthly
contributions.
When the employee resigns
When an employee who took
out a novated lease with the company decides to resign and transfer
to another company, he/she has to negotiate with the new employer to
take over the leasing responsibility or pending repayments. Releasing
the vehicle would depend on the employer.
There’s nothing wrong with
assigning a specific vehicle in the company fleet for a certain
employee’s use, on novated lease. You owe it to your top employees
to provide the assets needed for them to perform their duties better.
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