What is a Lifestyle Lease?
Lifestyle Lease (formerly known as Sale & Leaseback) is Maxxia’s version of a novated lease on your current car. A Lifestyle Lease lets you salary package your existing vehicle, unlocking any equity you have in it and giving you all the benefits of a novated lease.
I own my car. Why would I want to start paying interest again, when I’ve already paid it once?
Interest is only one consideration within a Lifestyle Lease. You now have the option of unlocking any equity you presently have in your asset, while potentially accessing pre-tax and GST savings on your car’s running costs. You’ll also get the convenience of having everything bundled into one regular payment.
Why would I make the switch if the interest rate is higher than my loan?
Unlike with a standard car loan, a Lifestyle Lease includes the ability to repay several years of car finance and other expenses with pre-tax dollars. There’s also potential GST savings on most of your running costs. For more information on how much you could save, check out our calculator.
Why would I want a balloon payment on a lease from a car I already own?
While this is a factor to take into account, there are many other matters to consider, including the set-and-forget convenience of having five years of running costs pre-budgeted for, and the potential savings that come through paying for your car with your pre-tax salary.
And at the end of the lease, we will be in touch to discuss your options, which include the option of upgrading to a new car, or refinancing any residual payment in the process.
I prefer vehicle ownership over leasing – why should I lease?
A Lifestyle Lease gives you the peace of mind of having all your car’s running costs – including big-ticket items such as registration, insurance and servicing – pre-budgeted for. Plus, at the end of the lease, you have the option of upgrading to a new car while continuing to enjoy the convenience and tax benefits of salary packaging a car.
What’s the catch – surely you’re not doing this for nothing?
You can rest assured our fees are completely transparent. In exchange for managing your salary packaging account, we charge an administration fee that is agreed upon with your employer.
Can I just package my car’s running costs?
No, the only way to enable the potential savings on your car’s running costs is by packaging them alongside the repayment of a vehicle through a Lifestyle Lease.
What information do I need before I call?
In order to “compare apples with apples” it’s helpful to have some information handy relating to your car and your driving habits.
- Running costs. Go back through your statements to get an idea of your annual car expenses, including fuel, tyres, maintenance, insurance, registration. Then use this information to complete our Running Cost Calculator.
It would also be great to know:
- How many kilometres you travel.
- How much you owe on your car.
- Your current interest rate, and the term left on your current finance arrangement.
Why is my Lifestyle Lease estimate higher than my finance estimate?
Finance estimates only cover the costs associated with repaying your car. All your other vehicle expenses – fuel, rego, insurance, maintenance and the like – are to be paid in addition to a loan, and at different times throughout the year, which can make budgeting difficult.
In a Lifestyle Lease estimate, all your repayments and running costs are included, making for easy budgeting and reducing bill stress.
How do you value my car?
The Market Value of your Motor Vehicle is determined by consulting Market Value Guides and factoring in a number of variables such as the make and model of the car, age of car, kilometres travelled, service history, condition of car and accessories fitted. This is agreed upon by you and your chosen financier.
What if I have finance on my current vehicle?
The financier will pay out the remaining amount owing on your current loan. The vehicle will then be refinanced under a Lifestyle Lease, but now accompanied by the potential tax benefits and convenience of salary packaging.
What if I own my current car outright?
We’ll help obtain an accurate and competitive price for your car before coordinating the sale. This will unlock any equity you have in the vehicle and the cash you receive will be yours to use as you see fit.
Does a Lifestyle Lease impact any other salary packaging benefits I might have or be entitled to?
Dependent on your employer, Lifestyle Lease is a benefit that can be utilised in addition to any existing benefits being claimed. So, if you’re a health employee, you can package a car in addition to your $9,010 cap. If you’re a charity employee, it’s an additional benefit to your $15,900 cap.
What if I spend more or less than I budgeted?
If you have spent MORE than budgeted…
We will contact you to discuss increasing your regular payments to ensure you can cover the higher amount. You should also monitor your online statements regularly and contact us if you notice your budget is being overspent. Then we can adjust your deductions even sooner.
If you have spent LESS than you budgeted…
At the end of your lease term we will reconcile your account within 60 days. If there is money in your account, we will send the funds to your employer. Your employer will then deduct income tax and pass the remaining balance back to you.
What is the approval process?
Wherever possible, we approve applications within four hours of receiving your request.
When will my contributions start?
The start of your contributions will depend on your employer’s cut-off dates for making changes to your pay. It can take up to two weeks for your contributions to start, but we will email you a Benefit Confirmation Schedule outlining the amounts and commencement date.
What happens at the end of the lease?
Near the end of the arrangement – after one to five years, dependent on the terms of your finance arrangement – we will be in touch to discuss your options, including whether you want to upgrade (and pay any residual amount) and enjoy all the benefits of a fully-maintained novated lease on a new car.
What happens if I change jobs during the lease term?
You have a number of options available, including:
- continue paying the lease and running costs yourself (with post-income tax dollars)
- transfer the lease to your new employer (subject to your new employer's approval)
- paying the amount owing and buying the vehicle outright.
Do I have to use Maxxia insurance?
Not at all. If you're happy with your insurer we simply budget for the annual premium and put that money aside so you can make the most of your pre-tax benefits. But if you choose to include an insurance provider from Maxxia’s panel in your Lifestyle Lease you can rest easy knowing you’re fully covered and for a very competitive premium.
What does FBT and ECM mean?
Fringe Benefits Tax (FBT) is a tax which is applied to benefits you receive from your employer that are not in the form of cash salary or wages. For example, a novated lease is a benefit outside your cash salary or wages – so it is subject to FBT. As of the 1st April 2019, the FBT rate is 47%.
This is where the ECM bit kicks in. ECM – or the "employee-contribution" method – is a standard novated lease calculation that helps offset any FBT you may be liable to pay on your novated lease. By making after-tax as well as pre-tax payments you reduce the taxable value of your car, and minimise the risk of a FBT liability at the end of the FBT year (31 March).
How do I activate my fuel card(s)?
If you’ve requested a fuel card (BP, Caltex or Shell) it will arrive via postal mail within one to two weeks. If you haven’t received it within two weeks, it’s important you contact Maxxia as soon as possible to prevent any unauthorised activity.
What about servicing and tyre replacement?
With a Maxxia Lifestyle Lease you can enjoy the advantage of access to our Maintenance Team, a team of qualified and experienced mechanics who consistently save our customers on repairs by ensuring:
- work meets the car manufacturer’s standards
- work carried out is reasonable and consistent with the age and condition of your car
- work that is covered by warranty is free; and
- labour and parts are supplied at competitive prices
The process is simple. When you drop your car off, let the supplier know Maxxia looks after your car and ask them to contact our Maintenance Centre on 1300 123 123 before they commence any work.
The team will also organise payments directly from your Maxxia ‘My Car’ account. To ensure there is enough funds in your account, we recommend you regularly check your balance via Maxxia Online. Once the work is completed your mechanic will contact you to collect your car.