Frequently Asked Questions

FAQs - Novated Leasing

What is a Novated Lease?

A Novated Lease is a three way agreement between the employee, the employer and the financier. In simple terms a Novated Lease is a finance lease between an individual and a finance company combined with a Novation agreement which means your employer is responsible for the lease obligations whilst you are in their employ. The novation ceases when employment is terminated and the Finance Lease between you and the Financier remains in place.

What are the benefits of a Novated Lease for the employee?

• Driving a vehicle of your choice utilising pre-tax dollars (salary sacrifice) to pay for finance and all running costs of the vehicle
• Access to fleet discounts otherwise unavailable to individuals
• Ability to build equity in your vehicle
• Ability to transfer the lease to another employer
• Flexible lease structures to meet the individual's requirements

What types of Leases are available?

FleetPlus offers a choice of a Novated Finance Lease or a Novated Operating Lease. The choice is typically made based on the driver’s intent at the expiration of the lease term.

• Novated Finance Lease
  Under a Novated Finance Lease, the risks and or benefits of ownership associated with the vehicle at lease end remain with the employee. The employee is responsible for the residual payment and GST at the end of the lease. Residual values are set within the ATO Guidelines.
   
• Novated Operating Lease
  Under a Novated Operating Lease, the residual value risk is the responsibility of FleetPlus Novated. The employee hands the vehicle back at the end of the lease in fair condition and within the agreed kilometres. FleetPlus then dispose of the vehicle.

What is Fringe Benefits Tax (FBT)?  

The Fringe Benefits Tax (FBT) system is intended to ensure that tax is paid on fringe benefits provided in place of, or in addition to, salary or wages of employees.

For motor vehicles, FBT can be calculated using either the Statutory Method or the Operating cost method.

What methods are the basis for a car fringe benefit calculation?

The taxable value of a car fringe benefit may be calculated by either of the following methods:

• Statutory formula method:
  The taxable value of the car fringe benefit is a percentage of the car's value. This percentage varies with the total distance travelled by the car during the FBT year (regardless of whether or not it is private travel). The greater the distance travelled, the lower the taxable value.
   
• Operating cost method:
  The taxable value of the car fringe benefit is a percentage of the total costs of operating the car during the FBT year. The percentage varies with the extent of actual private use. The lower the incidence of actual private use, the lower the taxable value. You will need to maintain a log book over a twelve week period to determine the private use percentage.

What are the Statutory Percentage Rates for FBT?

If you are using the statutory formula method it is important to estimate and meet your annual kilometres travelled to avoid paying additional FBT at the end of the FBT year. You can record your odometre readings when you are using your fuel card. Regular reports and web access allows you to monitor your progress during the year.

Annualised kilometres are calculated using the following formula:
A x C 
   B

Where A = the number of kilometres travelled in the period during the year when 
                 the car was owned or leased by the employer

              B = the number of days in that period
              C = the number of days in the FBT year

When is the FBT year?

The FBT year is the 12 months beginning 1 April and ending 31 March. FBT is pro-rated for any part of the FBT year where a benefit was provided.

What are the Minimum Residual Value Percentages set by the ATO Guidelines?

How is the taxable value calculated using the Statutory formula method?  

What is the Employee Contribution Method (ECM)?

Any after tax contributions made by the employee towards the costs of running the vehicle reduces the fringe benefit by $1 for every $1 contributed. This is a tax effective way of packaging when your before tax package is lower than the highest marginal tax rate, because FBT is taxed at the highest rate.

• The employee's contribution may be an amount paid directly by the employee to the employer for use of the car.
• The employee may also make a contribution by paying for some of the car's operating costs (eg. fuel). Car expenses met by an employee can be applied as an employee contribution.

What is an example of the FBT calculation?

Example of FBT calculation using statutory formula method

Assume:  

• the car is purchased by an employer for $30,000 (GST inclusive) on 1 October 2007 and that the car's base value is $30,000;
• for the whole period 1 October 2007 to 31 March 2008 (ie. 182 days) the car is available for private use by the employee who travels 15,000 kilometres. The projected total kilometres for the full 2007 - 2008 FBT year would be 30,082, with the result that the relevant statutory percentage is 11%;
• the employee pays fuel costs of $1,000 and provides the employer with the necessary declaration.

The taxable value of the car fringe benefit provided during the year would be:

Grossed up value assuming type 1 = 2.0647 * $645.47 = $1,332.7019

Fringe Benefits Tax = 0.465 * $1,332.70= $619.7055

Note: The gross up rate and Fringe Benefit Tax rates are based on rates announced in the May 2006 federal budget.

How are quotes prepared and supplied?

Lease rentals can be supplied to you via email and/or facsimile. The turn around time is 24 hours depending on the complexity of the motor vehicle.

When can I get my new vehicle?

Depending on vehicle availability, most new vehicles are delivered within two weeks of your credit approval.

Contact details: Please do not hesitate to contact us at FleetPlus Novated for further information and to request a quotation. FleetPlus Pty Ltd recommends users of this information seek independent professional taxation advice. FleetPlus Pty Ltd does not accept responsibility for reliance on the calculations provided herein. » Online Enquiry

FAQs - Leasing New Zealand

Aren't all leasing companies the same?

No, there are a number of reasons why FleetPlus is not the same as other leasing companies. FleetPlus is privately owned and operated, which means we are not driven by shareholders motivated to see a return on their investments in the shortest possible time. FleetPlus values the importance of your needs in respect to Vehicle Leasing and Fleet Management. We will customise our products to suit your business needs, offering much more than a generic vehicle leasing solution. Above all, FleetPlus is "Where Service Matters".

Why lease and not buy?

A FleetPlus Operating Lease means your business receives all the associated benefits of vehicle usage without the downside of ownership. FleetPlus enables you to maximise economies of scale by utilising the purchasing power we achieve via acquisition, servicing and disposal. Your business can free up working capital, generating a better return when reinvested into your business, rather than investing in non-performing assets.

Can I choose my vehicle?

Yes, FleetPlus are able to provide leases for all makes and models available in the New Zealand market; including passenger, light commercial and other selected commercial vehicles in various applications

How long can I lease a vehicle for in New Zealand?

FleetPlus provides leases in line with the IRD's guidelines for New Zealand; this is deemed to be 75% of the commercial life of the vehicle. In an example of a passenger vehicle this term should not exceed 45 months, but for other vehicles such as light commercial you can lease over a term of up to 60 months. FleetPlus also has the flexibility to offer a Mini-Lease for a term between 2 days and up to 12 months.

Does FleetPlus offer Fleet Management?

Yes! FleetPlus offers a full suite of Fleet Management Services, taking pride in the fact that we offer the most flexible approach to fleet management in the market. Fleet Management Solutions, customised to your specific needs and not outsourced back to you.

Does FleetPlus offer a Fuel Card Service?

Yes! FleetPlus has a fuel card facility which can be used at all service stations throughout New Zealand and offers discount at selected service stations.

Is Fleet Management included in all Fully Maintained Operating Leases?

Yes! FleetPlus Fully Maintained Operating Leases include fleet management, and there are no additional costs. The price you see is the price you pay.

Contact details: Please do not hesitate to contact us at FleetPlus for further information and to request a quotation. FleetPlus recommends users of this information seek independent professional taxation advice. FleetPlus does not accept responsibility for reliance on the calculations provided herein. » Online Enquiry

Where do I need to have my vehicle serviced?

FleetPlus offers you freedom to choose your vehicle service provider, as long as the service centre is approved by the vehicle manufacturer.