Welcome to the June issue of Lendcorp News.

In this Issue

	Introduction
	"Pre Tax" "Salary Sacrifice" Package
	Tips for Fuel Efficient Driving
	Are There Any Benefits in Using High Octane Fuel?

In Other News

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Introduction

WELCOME to the June 2008 edition of 'Lendcorp Finance News'.

In this month's issue we have included information on a "Pre Tax" "Salary Sacrifice" Lease Package that suits both an employer and employee.

We have also included an article on different ways to save fuel and you be the judge, "will you benefit by using high octane fuel in your car?"

Give us your feedback, if you would like any other issues covered, please do not hesitate to drop us a line at sales@lendcorpfinance.com.au.

Kind regards

The Lendcorp Team

"Pre Tax" "Salary Sacrifice" Package

Looking for an option suitable for both employer and employee?

NOVATED LEASE

A Novated Lease is available to all employees where the employer allows their staff the option of leasing a motor vehicle as part of their salary package.

Benefits for Employers

• The employer is able to provide a key benefit for it's employees by offering an attractive Novated Lease option.
   
• The employer is not left with an unwanted motor vehicle when the employee leaves.
   
• The employer can provide the employee with a motor vehicle without having to reflect it on the balance sheet.
   
• Offers many employers, if registered for GST, the ability to claim an input tax credit on the GST paid on the car lease.
  
  Benefits for the Employee
   
• The ability to cost effectively package the car of your choice. This process is completely flexible and only limited by how much you are able to allocate from your salary.
   
• The car is yours to use 100% of the time, it’s not a company car.
   
• Repayments can be fixed over a period of 1 to 5 years.
   
• As all costs are paid in pre tax dollars, a Novated Lease can be tax effective.
   
• When a car is  purchased under a Novated Lease, it often qualifies as a company car, therefore a fleet discounts will apply on a new car.
   
• A Novated Lease is portable and may be re novated from one employer to another (depending on employer acceptance).

How Does it Work

A novated lease is a three way agreement between the Employee, Employer and Finance provider.

The employee selects the motor vehicle of their choice and, subject to credit approval, enters into a financial arrangement with a finance lender or bank.

The most common form of Novated Lease arrangement is a finance lease where the employee enters into a commitment to make monthly car lease payments and fixed residual at the end of the car lease. The residual is an amount that is set by the Australian Taxation Office (ATO).

Under the novated lease agreement, the employer assumes all the employee's rights and obligations under the car lease, including the responsibility for making the car lease rentals while the employee remains employed by the employer.

The finance lease remains in the name of the employee who remains the registered owner throughout the Novated Lease and keeps effective control of the motor vehicle at all times.

If the employee leaves the company, the Novated Lease agreement expires immediately and the motor vehicle remains with the employee. In this situation, the employee generally takes over the payments or gets another employer to novated the finance lease again. 

To find out more on a Novated Lease please feel free to call one of our Broker's on 1300 880 089.

Tips for Fuel Efficient Driving

The way you drive and the condition of your car has an impact on the amount of fuel you use.  Here are some tips to save on fuel.

• Minimise your vehicle use
  Plan to do a number of errands in one trip rather than several trips
   
• Drive in the right gear 
   
• Drive smoothly
  Drive at a good distance from the car in front this avoids unnecessary acceleration and repetitive braking.
   
• Minimise fuel wasted in idling
  Most cars don't need to be "warmed up" by idling before setting off.
   
• Don't speed 
   
• Minimise aerodynamic drag
  Additional parts on the exterior of a vehicle, or having windows open increases air resistance and fuel consumption.
   
• Look after your vehicle's tyres
  Inflate tyres to pressure recommended by manufacturer and make sure wheels are aligned.
   
• Use airconditioning sparingly
  Airconditioning can use up to 10% extra fuel when operating, however if travelling over 80klm, use of airconditioning is better for fuel consumption than open windows as it creates aerodynamic drag.
   
• Travel light
  The more weight a vehicle carries, the more fuel it uses.  Leave heavy items at home when you don't need them.
   
• Keep your vehicle in good condition.
  Keep you vehicle regularly serviced as specified in the manufacturers handbook.
   
• Use the petrol that is recommended for your vehicle by the manufacturer. 

Are There Any Benefits in Using High Octane Fuel?

Is using Premium Unleaded Petrol (PULP)  economical?

With the rising cost of fuel, when it comes to what fuel to fill our car with, it is tempting to just go with the cheapest one we can find.

Will putting lower octane into our vehicle over time, harm the engine?

Are there any benefits of using a higher octane?

High-octane fuels were once considered a premium product and only used by a small number of high performance vehicles. Now these fuels are so common that it is available at almost every service station and we are being encouraged to use them if we want more power, a smoother drive and / or cleaner exhaust. But the question is do the facts support the claims?

In simple terms, the higher the octane the slower the burning, the more resistant it will be to knock. Higher-octane fuels allow engine manufacturers to increase compression ratios and vary ignition advance to provide performance benefits.

Australia’s current standard fuel is 91 RON(Research Octane Number) unleaded and most cars sold here since 1986 will happily accept it. However an increasing number of imported vehicles require 95 RON Premium ULP, which is the standard fuel in many other countries, and is likely to become Australia’s standard fuel in the future.

There are also an increasing number of high performance European and Japanese vehicles that require high-octane 98 RON fuel.

The engine’s octane requirement is usually outlined in the vehicle’s handbook and the fuel you select for your car must have an octane number at least equal to that specified.

But will using a fuel with a higher octane number than required actually provide any benefits?

Unfortunately, there is no handy guidebook to tell you which cars will benefit and which ones won’t. Some vehicles will definitely perform better on high-octane fuels and others will show no obvious benefit at all.

The benefits for fuel injected vehicles will depend on how sophisticated the car’s engine management computer is and whether the engine can make use of the extra octane. Computers that are capable of adapting fuel and spark maps to the fuel being used are most likely to show improved performance while cars with less “smart” computers typically won’t benefit.

Anecdotal reports suggest that some cars will actually produce better fuel consumption on premium fuels, although in most cases this alone is unlikely to offset the increased fuel costs. The only way to really find out, is to fill the tank with one of the premium fuels and try it.
 

That's all for this month's edition. 

In closing, we hope you have enjoyed this newsletter and look forward to some feedback.

All the best from the Team at

Lendcorp Finance

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