What Is a Novated Lease?
A novated lease is a three-way agreement between:
- A vehicle financier
- Your employer
- An employee (you!)
An employer agrees to pay for the finance of the car from your wage while you work for the company. The employer then takes the repayments out of your “pre tax” salary, doing a “salary sacrifice”, thus reducing your taxable income. While the contract for the finance is between the employee and the finance company if you change jobs, you take your novated lease and your car with you.
At the end of the term of the novated lease you may have the option to purchase the car for a residual, or you can sell and trade. If you find you make a profit from selling the car, then it’s your to keep!
What kinds of novated leases are there? – There are two kinds of novated leases:
- Fully Maintained Novated Lease – where all the operating costs of the vehicle are covered, such as insurance, vehicle registration, fuel, tyres and servicing. In this instance you pay a regular monthly payment, and the leasing company covers all maintenance expenses.
- Non-Maintained Novated Lease – when you are responsible for all operating expenses associated with the vehicle.
What are the benefits of a novated lease? – There are numerous benefits of a novated lease, including:
- You get to choose whatever car you like, whether it’s a Mini or a Mercedes
- 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 – 5 years
- Financing of the vehicle is paid with pre tax dollars
- As a car purchased under a novated lease often qualifies as a company car it may come under a company fleet discount
So how can we help you? Use our Novated Lease Quote form now and we will have a Novated Lease Broker contact you immediately to discuss your specific requirements, so what are you waiting for...