Novated leases aren’t just for new cars. If you’re thinking of getting a second hand car you can package it as well. The only real rule when it comes to including a second hand car in your salary package is that it should not be older than eight (8) years old at the completion of the lease. There is no restriction on where you can purchase your car, giving you the freedom to purchase from a private seller or a car yard.
If you are considering a second hand car purchase for your package, here are a few tips to think about:
Time
When buying second hand, it may take you longer to find the right one or you may have to compromise. Write a list of things you want in your car and divide them into ‘must haves’ and ‘would likes’. This way, you won’t be swayed by a lower price, quick sale or other salesman tactics.
Research
Do your research – this means, check reviews and google search the make and model of the car. See if there are repeated reports that it’s a lemon and maybe steer clear. In addition to general research on the vehicle type, do proper research on the actual car you’re looking to buy. Ask to see the service history book, do a check through your states registry websites on the details of the car, including VIN or Engine numbers or you may want to pay someone to do a proper full history on your car from websites like vehicle history.
Mechanical Checks
Make sure you get a full mechanical check of your car, and by someone you organise. There are mobile services that will come to you or alternatively get your personal mechanic to give it the once over. While a second hand car might be cheaper initially, it could end up being more expensive in the long run.
Include additional spending in package
One of the benefits of buying new is the limited need for major repairs. Make sure you take the history and age of the car into account when determining your additional spends on the car for your packaging purposes. For example, you may need to increase your servicing costs or add a provision for new tyres. When buying second hand, you need to be more diligent with the process. There are generally no warranties or guarantees and you could end up paying more than you would for a new car if you make a mistake. But if you do your research and get it right, you can enjoy your car and still get a tax saving along the way.