We all know there are heaps of automotive lease providers out in the market. But how can you spot a bad novated lease provider from the good? Don’t worry, if you’ve ever had trouble before, these tips will surely help you pick them out.

What’s a Novated Lease?

Before diving into the tips, it’s best to grasp a full understanding of the term ‘novated lease’. For those who are unfamiliar, a novated lease is essentially an agreement that is made between you, your employer and a financial provider company.

 

What types of novated leases are there? 

• Fully-maintained operating lease: Under this type of leasing, all the operating costs for the vehicle (tyres, registration, fuel and oil, accident management, insurance etc) are managed on your behalf and included as part of your salary package.
• Non-maintained operating lease: If you choose to sign up for a non-maintained operating lease, you are responsible for all vehicle maintenance and running costs.

So if you’ve decided to lease a car – congratulations! You’ve taken the first step, but what follows next is just as important. So here are the 5 tips to avoid a bad novated leaser provider.

They hide the Interest

“How much do you charge for interest?”

A question like the above should be directly addressed to the novated lease provider. And yes, the bad ones will not tell you upfront. Hence, make sure to enquire and confirm any of your doubts before signing the agreement. You shouldn’t be ashamed of asking too many questions. After all, it’s your money coming out of the bank.

They lack access to a network of Financiers

You can, in fact, ask the novated lease provider about the number of financiers they have access to. A good novated lease provider has access to over 10 financiers so they can curate the best deal for your personal circumstances. Aside from that, a good novated lease provider wouldn’t hide from whom they do get the best deal through. As for a bad novated lease provider, it’s pretty much the opposite.

They tend to beat around the bush

One major difference between a bad and a good novated lease provider lies in method and approach for client service.

Does he ask you on what type of car you’d like?

Most of the time, a good novated lease provider will try his best to find the perfect Novated Lease with maximised benefit for you. On the other hand, a bad novated lease provider would just recommend you a vehicle that yields a higher sales commission.

They give unrealistic quotes

Are the quotes realistic enough?

Some bad novated lease providers generate instant quotes without understand your personal circumstances first. Although speed is of the essence, you are likely missing out on higher savings. As such, never be scared to ask the consultants about quotes. Remember, you are the one who’s going to be depending on that vehicle for the next 10 years. Dig around for other reliable quotes and don’t forget to compare.

They have poor service networks

The good novated lease providers have a comprehensive servicing network to help you. As for the not so good ones, their inadequate and unreliable networks results in higher long term maintenance costs with little guarantee of quality service.

Have you used novated leasing before? Share your experience.