If you’re asking “How can I refinance my car with bad credit?”, keep reading. Refinancing your car can be a stressful experience. If you have poor credit, it can even feel impossible at times. Luckily, there is a new way to help you refinance your car called novated leasing.
What is a Novated Lease?
A novated lease refers to an agreement between you and your employer that allows you to use your employer’s vehicle without technically owning it. Refinancing your car through novated leasing can give you many benefits over traditional financing options, like lower repayments and a great driving experience. So how does it work? Let’s go over everything you need to know about novated leasing.
What’s Involved in Getting a Novated Lease?
Two signatories – your employer, who provides financial support for the vehicle, and you, as they’re effectively lending you money through novated leasing.
Employer pays less – if an employee chooses to lease a car using a novated lease scheme, their employer will pay less than if they were to purchase it outright. If your employer is paying less for your car over time, that means they can devote more of their total budget toward funding other business expenses and adding value in other ways.
No money down – it can be difficult for employees to come up with thousands of dollars for a car, particularly if they’re leasing. Employees who take part in novated leasing don’t have to pay anything upfront, and some schemes offer attractive lease payments that are less than what they’d pay on a car loan.
Lower repayments – as previously mentioned, most novated lease arrangements involve lower payments than you would make on a personal car loan.
Benefits of Using a Lender Representative
- A lender’s agent or representative can help explain your options and walk you through any paperwork.
- Their job is to sell loans, so don’t be surprised if they only present loan products from one lender.
- An existing customer can get a better deal on your existing loan.
- Your lender might be able to offer specific products or programs that aren’t available through their website or customer service center.
- They might help negotiate a lower interest rate than you could get yourself.
But do your research and compare lenders before applying for novated leasing. According to Lantern by SoFi, “Lenders that specialize in refinancing for people with bad credit may be appealing, but be careful. Some may be predatory and charge exorbitant interest rates.”
The decision to sign up for a novated lease is personal. While some people love taking advantage of car leasing services offered by their employers, others say it’s too restrictive. If you’re interested in signing up for novated leasing, remember that you can always change your mind at any time. If you don’t like it after a few months, you can take steps to terminate your lease.