Transitioning to or away from company cars… that is the question

Is your company’s car policy a scene from an old TV series?

Let me tell you a story…

Cast your mind back to the 70’s and 80’s – remember when the car policy read like: CEO: White Ford LTD, General Manager: White Ford Fairlane and Sales Manager: White Ford Falcon…?

The Sales Manager arrives just before 7:30 and is straight to work, head down getting the job done. At about 9am the General Manager arrives – he walks through the foyer with a light swagger and small heir of arrogance, disappearing in to his office for the morning.

But then at 10:17am, as per almost every morning, the CEO gets to work. He walks in to the foyer and takes off his hat and his coat, hands it to his secretary. She hands him his messages and he proceeds to his office, where he walks to his liquor cabinet and pours himself a whisky – neat – lights a cigar, and  settles in to his comfy reclining desk throne…

You probably can’t relate, can you?

Oh, how the times have changed

The point is this example of a “throw-back TV Series” addresses how completely outdated and irrelevant this scenario is in our society today – some of you are even wondering what a Ford LTD, Fairlane or Falcon are… but many of us still act in the same way when it comes to this discussion on company cars.

All over the world, irrespective of which industry, companies use vehicles to actively enable the objectives directly aligned with “fulfilling the purpose created by a need”.

In some cases, it is completely necessary for a company car to be used – there may be a scenario that requires a specific type of vehicle – it may even be purpose built. But whether this is the case for your business or not, it only accounts for 3 – 7% (generally) of the entire work-force.

So how do we find a solution for the remaining 90% (+) of this afore-mentioned work force? One that allows us to enable our staff to:

  • Have access to a car for their needs – regardless of their job title or responsibilities?
  • Do their job without hesitation and still feel valued, supported and secure in their roles?
  • Do all this without the ongoing costs to our budgets, time and resources? Have no risk, no FBT and greater influence!?

Leave company cars in the past – and consider a Novated Lease

While most people have heard of a Novated Lease, it is sometimes misunderstood or not considered as a viable alternative to the company car – let me summarise and recap on the benefits for you.

It’s finance, paid for out of the employee’s income by the employer. It saves 10% on running costs AND reduces the income tax paid to the ATO – resulting in thousands of dollars of savings every year!

Further to this, your motoring becomes ‘cashless’ and easy as result of the management provided. I’ll break down the benefits in to some key dot points:

The benefits of a novated lease

Making Novated Leasing work for you

The real and tangible benefits resulting from this solution are undoubtable. But how do we create a suitable transition for either those that are in company cars now, or others you’d like to provide the benefit to?

First, you’ll need to establish the true ‘whole-of-life’ cost of a car to your company. This includes all the costs associated with maintaining, running, repairing, sourcing, managing and remarketing the vehicle.

Once you have a true whole-of-life cost 2 things will happen:

  1. You will see just how much a company car costs on your balance sheet
  2. You will be able to create an educated figure for a transitional increase in pay, shown as a “car allowance”

This will both reduce and limit your costs AND remove the liability and risk involved in any of the vehicle transactions, by giving the responsibility of the car to your employee to control for themselves.

Next step? You’ll want to introduce INSIDE EDGE as your Novated Lease specialist to manage the whole Novated Lease process for you.

Reap all the benefits with INSIDE EDGE

That last suggestion may be a little cheeky, but let me summarise the benefits you stand to gain from an organisation that recognises the genuine value in you and your company, and the opportunity you have as a result of Novated Leasing.

On top of all the above benefits for companies and employees, as a valued partner of INSIDE EDGE you and your team will receive:

  • Consult and advise on vehicle type
  • Sourcing of the vehicle
  • Coordination of the finance and delivery
  • Management of repayments and running costs
  • Advice on remarketing the vehicle as required at the end of the lease period

So, do you really want to turn down an opportunity to not only bring value to employees and save costs, but:

  • Enjoy less strain on resources and workloads
  • Provide greater efficiency
  • Achieve a better culture
  • Garner improved results
  • Ensure company growth and increased profits

Now let me ask you… How do your colleagues and employees buy their cars? How’s YOUR Novated Lease?

Contact me today for a no-obligation chat and let’s discuss how INSIDE EDGE can support your business!

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