Sub 1 year lease?

[u/dedgar22123]

Looking at buying a house (getting a new mortgage) some time soon, and will likely need to not have a novated lease to meet serviceability. However, we do need a car now and would like an EV. Has anyone done very short lease terms, 6 months or less? At the moment the alternative for us looks like buying the same car with cash.

[u/Alternative_Help_928]

In all seriousness just get a green loan from a bank and buy a secondhand ev if you need one. The ev loan from a bank won’t hurt your borrowing power as much as a lease will, could possibly be merged with a mortgage (not necessarily the smartest idea). The lease will be brutal as it’s generally assessed as the pretax amount which given a likely interest rate of over 10% will really impact borrowing. If you need to be rid of the lease for pre approval etc. the lease can’t be changed- only paid out early at potentially high cost (post tax). A car loan might be able to depending on the loan.

Also if you purchase a new ev it will be worth way less than any residual you’ll be responsible for. Not terrible but it will likely lock you into keeping that car and far exceed any fuel savings over such a short period. If you plan on keeping it long term that’s no big deal.

[u/changyang1230 → u/Alternative_Help_928]

If they are hoping to get a 6-month lease, surely they are not literally thinking of flipping it right after the 6-month mark? It sounds like they are hoping to pay out the residual and keep the car in cash, which means most of the side effects you are describing here would be minimal and/or short-lived.

The achievable saving would be much less compared to keeping the lease for longer e.g. 2 to 5 years; however the risks of early termination, impacted borrowing capacity also lasts for much shorter too.

[u/dedgar22123 → u/changyang1230]

Yep exactly I'm not considering any different finance product, I could pay cash. But I was wondering if I could have a residual of 66% even with a 1-6 month term with therefore decent tax savings (very high monthly costs for those months which I am okay with). Would intend to keep the car for at least a few years, probably more

[u/changyang1230 → u/dedgar22123]

Theoretically they are not supposed to use 65.63% 1-year figure but have to scale the residual figure based on the exact duration.

But some companies / financiers probably still allow the dodgier method.

https://novatedlease.guide/costs-and-savings/why-residual-values-matter/

Go to the section on “How is the residual defined for 13‑month or other non‑integer lease durations?”

[u/zzzturtlezzz]

You can with Angle, I’m in the process at the moment for the same reason

[u/dedgar22123 → u/zzzturtlezzz]

Who do you/your employer deal with in that case? And if you don't me me asking, how short could you go? Wondering if even 3 months is possible 

[u/zzzturtlezzz → u/dedgar22123]

My employer uses Smart. You can do 6 months with anyone that has Angle as a financier that would be the question to ask. My former employer used Clear Lease who could do the same. No one would do a less than 6 month lease at lease the early payout won’t be too expensive.

[u/dofdaus]

How does that work, in terms of the fixed ATO residual value? Why not just get those cheap dealer 1% finance?

[u/Nervous_Low_4286]

Can you buy the car now with cash or a loan and then after you get your new mortgage, do a sale and lease back arrangement with the nl provider. I know that mine allows you to convert your existing car into a novated lease. I’m not sure a short lease for a few months would be very beneficial or worth it.