KEY POINT: Can be a Finance Lease or Operating Lease.

KEY POINT: A salary packaging product that’s available to most employees.

KEY POINT: Funding, Management and Maintenance can be split.

NOVATED LEASING, post Rudd

Topic:

Why should I care?

•The landscape has changed…. I’ll give you a snapshot .

•What happens if a One Trick Pony dies?

•Where is the product headed?

The Landscape has changed….

….the old

- More KLMs less FBT

- At 40,000+ pay 7%

- Cost or Statutory

- Overestimate deadly

- Adelaide and back

….the new

- 20% FBT fraction

- Not KLM based

- Post tax contrib.

- Urbanites win

- Broader user base

- Charity/Govt users

THE ONE TRICK PONY

Only slightly sick…The whims of government policy dictate the fortunes of

the listed car-leasing sector, which operates under constant fear of a destructive revision of the favourable —

and, arguably, anachronistic — car fringe benefits tax regimen.

Near death experience…

• Recap

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Lest we forget, resurrected PM Kevin Rudd proposed to change the rules that in effect limited the car FBT concession to actual business usage. But he didn’t win the election and with the Coalition supportive of the status quo, the idea lapsed.

What’s wrong with my Pony?

While their business models vary, the companies clip the ticket with interest margin on funding, maintenance and

re-marketing the used clunkers, administering the packages or broking commissions from third-party

funders. {The Australian 13/3}

Lets remember….

For the potential REWARD - $$$, there is risk.

-Dealers see novated as foregone retail sale.-A lease is a lease , is a lease. Times are tough.-Resale values , don’t buy pink… grey imports.-Its still worth it if you are careful.

ARE CHANGES EXPECTED?

• Morgan Stanley says: “We believe the market is ascribing too high a probability for a major change to FBT legislation — that is, one that would end novated leasing .”

• There’s a residual concern the issue eventually will be readdressed — either by a reinvigorated Turnbull government or after an against-the-odds Labor win.

# with every aspect of tax reform supposedly on the table, the purists argue why car perks should be concessionally taxed. {The Australian 13/3}

• Remember

– Going, going,……..9

The Future… • Views expressed

are my own……the Government will change it, slowly…the benefits of bulk buying and co-ops easier via Internet…rise of the aggregator…disruptive trends…young drivers disassociated…car clubs, self drivers, Uber…and finallymy crusade…Fleet Management

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We need new ways

GEN Y EXPECTATIONS

OWNERSHIP IS NOT A KEY

RETAIL EXPERIENCE…TOASTER

FUNDERS EMBRACE TELEMATICS

FLEET MANAGEMENT NOT FLEET ADMINISTRATION

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Telematics and Tracking

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Novated in a BOX?

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thankyou

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