How does interest rate work?
Hi everyone,
Quick novated lease question, I’m looking at an EV novated lease quote and trying to understand how the interest/finance component is calculated.
My question is: for novated leases, is the finance repayment/interest normally calculated on the GST-exclusive lease price after the upfront GST saving, or on the GST-inclusive vehicle value?
When I calculate the rate based on $70k, it looks around 13% p.a., but if I calculate it based on the GST-exclusive $63,961, it looks closer to 16%+ p.a.
Am I misunderstanding how the GST saving and finance component works here, or does this quote seem like the finance rate is higher than it first appears?
u/GovernmentFinancial7 — 4 days ago