Discount Car Finance

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The discount car finance service is a very unique service that facilitates the purchase of both old and new cars at discounted or reduced prices. There is a whole network of authorized car dealers who provide this discount car finance service.

Discount cars can be financed by using the following financial services:

  • Novated lease/Salary Packaging: This facility is availed by individuals who receive a car as part of their salary package.

    Operation of the novated lease

    The novated lease works in the following way

    1. First the car is chosen and leased from a finance company.

    2. Next the lease is shifted to the employer wherein he takes responsibility of the rights and obligations under the lease. The employers also have to pay the lease rentals.
    3. Even then, the owner of the contract has effective control over the car.
    4. If the person taking the discount car finance leaves his job, he has the option of keeping the car and taking the responsibility of the lease payments or catching hold of a new employer who could take such responsibility.

    Salary Packaging: The employees have the option of choosing a salary structure with cash and benefits that suit their needs. The benefits can be both, i.e., either tax free or taxed at concessional rates.

  • Chattel Mortgage: This is the system of providing finances to companies or business professionals for the purchase of the car and who use it more than 50%. The ownership is transferred at the time of delivery to the person or company taking this chattel mortgage. The finance company finances the loan with the help of a mortgage on the vehicle.

    The chattel mortgage scheme is characterized by the following benefits.

    1. If the vehicle is used to produce assessable income then the car receives tax benefits.2. The chattel mortgage system finances 100% of the vehicle.3. Early repayment of the mortgage amount is permitted even before the expiry of the contract. The term can vary from 1 to 5 years.4. The chattel mortgage has fixed rates of interest.
  • Finance Lease: This is another method of discount car finance. This is again, similar to the chattel mortgage, used by the companies and business professionals. At the expiry of the contract the lessee has the option of purchasing the car, refinancing the car or returning it to the finance company.

    The following are the features of the finance lease.

    1. An initial cash outlay is not required.
    2. Then lessee is at liberty to choose lease terms and repayments suiting his purpose.
    3. The only security that is required to obtain such finances is the car itself.Since no initial deposit is required for lease finance the lessee gets immediate possession of the vehicle.
  • Operating lease/Rental: This is yet another means of discount car finance. This is purely a rental agreement characterized by fixed costs. There is also no residual exposure at the contract expiry.

    The operating lease has the following properties:

    1. There is no risk or obligation of disposing the car.
    2. No initial cash payment is required.
    3. Just like finance lease, the operating lease also offers tax benefits if the car can generate assessable income.

    For more details on discount car finance sites like carbroker.com, count.com. and discountnewcars.com are worth viewing.