A Novated Lease is an incredible opportunity for employees to obtain a low-cost vehicle lease that is deducted directly from their pre-taxed salary.
Vehicles under Novated Lease agreements can be considered part of a benefits package, and it can often help the employee save money on income taxes.
- Employer assumes responsibility of the lease and deducts payments from employee income
- Flexible alternative to a company car
- Novated Leases can be transferred to another employer
In a Novated Leasing agreement the employee arranges to lease a car from a dealership, financer or a private third party. Payments are deducted from the employee’s pre-taxed salary, potentially saving the employee hundreds of dollars on income tax.
Technically, a Novated Lease vehicle can be considered a company car and qualify for tax benefits in certain situations for the employee. Consult your Accountant for more details.
Contact one of our experienced consultants who can help you locate a Novated Lease Agreement that is affordable and attractive.
- Vehicle is paid for directly out of your salary
- If you leave your employment, the Novated Lease and vehicle can be transferred to your next employer
- Employee has more control over vehicle choice compared to company car
- Financier may offer flexible lease payment options
Lease terms typically range 1-5 years. At the end of the term you may be eligible to purchase the vehicle for the residual value, refinance the vehicle, or sell it.
Employers favour Novated Car Leasing agreements as do their employees. The employee pays for the entire vehicle lease and the agreement comes at next to no cost for the employer.
Other benefits include:
- Employer could save on GST
- Can be more cost effective than maintaining company car fleet
- Employer does not own vehicle, so no capital investment or risk of ownership
- Typically ‘off balance sheets,’ unlike company cars
Employers may be charged the Fringe Benefit Tax (FBT) for Novated Leasing included as part of salary packaging.
Fully Maintained Novated Leases
Some finance companies offer Novated Leases that include running costs for example fuel, insurance and servicing.
Novated Leases can offer an extraordinary deal for employers and employees alike. You can call us from anywhere in Australia such as Perth, Melbourne, Sydney or Brisbane and we could organise a Novated Lease for you. Our experienced team could get you a great finance deal quickly and organise a new or used vehicle at the same time.
FAQsVIEW ALL FAQs
Finance Lease: If you use your car predominantly for business purposes and you have an ABN, you may be eligible. With this lease, the lender buys the vehicle and leases it to you. You then make regular lease payments to use the vehicle. At the end of the lease term you can either purchase or return the vehicle.
Available to body corporates and sole traders/partnerships where the vehicle will be used predominantly for your business (50% or more).
Novated Lease: Depending on your employer, you may have the option of receiving a vehicle as part of your salary package. As an employee, you remain the registered owner throughout the Novated Lease, while your employer organises repayments from your salary. If you leave the company, you organise the repayments directly, unless your new employer takes over the Novated Lease.