Unlike regular car ownership where you pay for all vehicle running costs upfront, with a Novated Lease these payments are either made upfront and then reimbursed, or paid up front by your lease provider. This article focuses on the latter, where you are not required to pay running costs out of your own pocket as these are paid by your lease provider. So how does an automatic expenses system work? We break it down per service and show you how you can monitor your account spending.
When purchasing fuel for your leased vehicle, companies which use an expenses system provide you with fuel cards for BP, Shell & Caltex. These cards can be used at any of these service stations nationwide. Using fuel cards is simple – instead of paying with cash, the cards charge amounts directly to your Novated account. These amounts are then paid from the money in your account by your lease provider directly, so you are never out of pocket.
For maintenance, repairs & roadside assistance
When booking your vehicle in for maintenance and repairs, or requesting road side assistance, it is important to use an approved supplier. Your Novated lease provider should give this to you at the start of your lease.
When using approved suppliers, the process is straightforward – when making a booking, state that you are a client of your Novated Lease provider and that the charge is applied to them. The supplier will then use your name and vehicle registration to verify your account, and contact your Novated Lease provider to arrange payment. As the payment is arranged between the Novated Lease provider and the supplier, you do not have to pay and then be reimbursed later.
How to monitor costs & reimbursements
In cases where your Novated Lease provider uses an expenses system as noted above all vehicle running costs are directed to the provider. The client portal solves these problems by providing a full cost breakdown to clients, including amounts spent on insurance, registration, fuel and other running costs. You can also submit reimbursements through some Novated Lease providers portals.
Being able to quickly access an overview of your account spending also allows you to be aware if your account is in debit and see if you are using more of any particular service than is required.
An expense system method of paying for vehicle running costs is much simpler than many other suppliers who solely use reimbursement models. As we take care of running costs on your behalf, you will generally not be left out of pocket. Not having to pay upfront for these expenses, as well as being able to quickly check spending and submit reimbursements online makes managing Novated Lease costs simple.