Novated Lease Management costs - what are you paying?

Funny you post this I was right this minute looking at a Delivery Confirmation Docket for a Novated arrangement given to me by someone else.

This is through Fleet Partners and they list Management fee at $19-, Admin Cost $18- and Fuel Management & FBT Reporting at $4-.

Don't know what if any set up fee that may apply.

This was for an employee of the ANZ Bank so they may also have negotiated an arrangement with this company to negate some of the costs???

Hope this helps.

Ours is as follows:

Admin fee: $12.69 pre-tax
Vehicle Management Program fee: $3.50 pre-tax
Establishment fee: $6.25 pre-tax

All fees are per fortnight.

The setup fee is a ripoff IMO and seems to work like mortgages etc. They make enough out of the interest etc not to need this amount.

I would be more concerned about what interest rate they are charging at the moment as that seems to be the area that they make money, and one which is not clearly explained IMO.

Hope this helps

Andrew

Hi Mike,

I reckon I have the same Management company as that is what I am being charged, and yes they are a ripoff. They will also slug you $15/month for their fuel card - that was not shown on their schedule of charges. Lucky for me my employer picked up the charges due to them changing over to this scheme, but you can see where these companies are making money hand over fist once the deal is set up.

Cheers

Captain

SMB.....set up fee $228
management fee (monthly) $19

Probably the most expensive way of financing a vehicle - the 'loan' of last resort!

Hi,

SGFleet (prev SMB) charge me $18 Mgt Fee and Fuel card fee of $2.27 pe month. No upfront fees and I've never seen an estab fee on my previous leases.

However, they did try to take 2 months of salary sacrifice in the first month due to "timing", I changed the vehicle delivery date to avoid this.

Regards,

Michael

Hi All

I know of a certain South East Queensland Council, whose Staff
are invited to have Novated Leases, the Council purchases the
vehicles under Local Government Tender, inturn the Staff Members
lease the vehicles at a cheaper rate, they are serviced by the
vehicle supplier at local government rates,and to top things off
they only pay the Local Government Tender Rates for there Fuel
if they fill up at the Council Depots Fueling Facilities, plus they still
get the fuel card for else where, they nominate what extras they
want on there vehicles, all at local government Tender Rates,
and us Rate Payers Subsidise all this.

Cheers
Daza

I also had high fees through SALPAC. You can check their fees out online. I agree the fees are a rip off for the poor service provided. To cover my lease I had to modify the package myself as their estimates were very poor. Beware not alwys the best for everyone, good if you do the 25000k and wanted a new car. I will never go this way again though. Cheers Tony

Thanks everyone for your replies. Looks like SMB/SGFleet might be getting the chocolates on this one.
Mike

If you need to, seek advice prior to entering into a novated lease you may need to pay a financial planner or accountant a fee for the independent advice and comparisons.
You should consider 4 options and compare the AFTER TAX income result of each
1) Purchase outright pay cash and no lease
2) Use a line of credit or mortgage and no lease
3) Use a personal loan and no lease
4) Novated lease
Allow fo any "lost opportunity costs"
Benefits will depend on kms travelled each year
Will also depend on the lease term you select and the residual value you select.
Then a lot will depend on the "facility" provided by your employer - some employers stipulate particular "bureau" service providers - some will allow a multitude of choices re financiers, fuel providers, reimbursement etc
It is LEGAL and provided for under the Tax Act
Some people don't know what they are talking about and should not comment (but thats the attraction of this forum good or bad)
There should be no need to pay a "set up" fee - there are enough fees along the way in the bureau service, the lease costs, the vehicle purchase cost, the insurance etc
Seek professional advice from a competent person