Save $1000's with a novated lease

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What is a novated lease?

A novated lease is the most cost effective way to buy and run a car.

It's a three way agreement between you, your employer and the novated lease company.

Straight off the bat you do not have to pay the GST on the purchase price of the car, instantly saving you thousands of dollars.

You can also include all of the running costs of the car, including fuel, registration, maintenance and insurance. This further increases the huge savings you can make with a novated lease.

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Best of all, there is no requirement for you to use the car for business use or drive a certain amount of kilometres.

How does a Novated Lease work?

Just like other forms of car finance, there are typically a number of payments over a fixed term, with a residual (or balloon) payment due at the end of the lease.

Each party to the agreement - employer, employee, and financier - will play a specific role:

  • The employer agrees to make regular, automated payroll deductions from the employee’s pre-tax salary.
  • The employee agrees to have those pre-tax salary deductions taken out, in exchange for the use of the vehicle. The vehicle can be used for business purposes, but can also be solely for personal use. 
  • The financier procures the vehicle, establishes the lease and manages the administrative, contractual and compliance aspects of the transaction.

Payments are made directly to the financier by automatic payroll deduction before the PAYG income tax is deducted from the employee’s salary. 

The cost of the vehicle and the cost of finance - minus the balloon payment - will be spread over fixed payments throughout the term.

The role each party plays in a novated lease.

Novated Lease Explained
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As you save the GST on running costs, you can save over 10 cents per litre on fuel each time you fill up. That's a $12 saving on a 60 litre tank.

How you save on tax

Your employer will pay the novated lease company directly from your pay to cover the costs of your car and running costs.

A portion of this payment is taken before you are taxed. This ultimately reduces your taxable income and therefore increase your disposable income.

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Qualifying for a Novated Lease

To QualifyCommon Disqualifications

Employed on a full-time or permanent part-time basis

Sole Trader

Employer supports a novated leasing agreement

Cannot demonstrate your ability to make repayments for the full term

Capable of meeting repayments

Really bad credit (eg: Court Judgements & Large Financial Defaults)

Over 18 years of age

As it's the employer responsible for paying the lease company, if you do have bad credit, it's still very much possible for you to qualify for a novated lease.

Quick fire Novated Lease Questions

Can I buy a used car with a novated lease?

Yes, right now, people more than ever are buying used cars instead of waiting for a new car deal. Buying a used car from a dealership will still see you save the GST off the purchase price!

Is there a minimum salary to get Novated Lease?

Novated leasing approval is dependent on your capacity as a borrower much like traditional finance. This means you need to illustrate your ability to meet regular repayments over the term of the lease. 

For example, as it is entirely dependent on your personal living situation, expenses and dependents, you could gain approval for a $30,000 vehicle on a yearly salary of $45,000.

What's the minimum and maximum I can get for a car?

The amount you can borrow for a vehicle will vary depending on the lender. In general, the minimum novated lease amount is between $5,000 and $10,000, while higher amounts are subject entirely to the repayment capacity of the applicant. 

Novated lease agreements may exceed $100,000 but very rarely exceed $150,000.

Novated Lease minimum and maximum amounts

Minimum amountMaximum amount

$5,000 - $10,000


How long will my Novated Lease be?

The term of the lease agreement is flexible, to suit the employee.

Generally, terms of one to five years are available under a novated lease, although 7-year terms are also possible. The shorter the term of the salary packaging agreement, the higher the residual.

Minimum Term Maximum Term

6 months

7 years

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What happens at the end of a Novated Lease?

You have a few options available at the end of your novated lease term:


  • Pay any balloon residual amount and gain full ownership of the vehicle
  • Sell the vehicle and any claim any profit from the vehicle (above the residual) tax-free
  • Refinance the vehicle into another term
  • In some cases, you may be able to return the vehicle to the novated leasing company without paying any residual amount


The residual amount on your novated lease will vary, and shorter terms will have higher residuals attached. 

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Leaving your current job during a Novated Lease

If you leave your job during the term of your novated lease, or are fired from your position by the employer, you will still be responsible for making payments on the vehicle. 


The lease will be de-novated, where the running costs are removed from the agreement and repayments work much the same way as a standard car loan. 

Novated Lease early termination

If you are terminated from your position, the employer is required to notify the leasing company with details of the end date of your employment. 

A reconciliation statement of the account will be provided to you by the employer, which will document all incoming and outgoing payments throughout the lease to that point:

  • If there is a deficit in payment and money owed on the account to the lender, the employer will advise final deductions from the employee’s pay to cover the amount.
  • If there is a surplus, where funds haven’t been used for running costs, these are returned to the employer and passed on to the employee. 

If you are employed again and the existing lease is incorporated as part of a salary packaging agreement with your new employer, the lease will be novated again and you’ll continue making payments as you did previously.

Novated Lease if you work for your own company

A novated lease can be suitable for a business owner who is also an employee of their own company, but it’s only an option if the business owner is receiving a salary from the company they own. 

If you are planning to leave your current employment to start your own business, you can transfer your novated lease, provided you are paying yourself a salary.

If you are self-employed - i.e. are not paid a salary or paying yourself a salary through your own company - you will need to look at alternative forms of vehicle finance.

The Top 10 Most Popular Cars Novated in 2021



Ford Ranger


Toyota RAV4


Mazda CX-5


Toyota Hilux


Toyota Landcruiser Prado


Mitsubishi Triton


Hyundai i30


Toyota Landcruiser


Isuzu D-MAX



These cars are also popular: Isuzu MU-X, Toyota Kluger, Subaru Outback, Ford Everest, Nissan Navara

Can you help me get a novated lease anywhere in Australia?

Even more so since Covid-19, we can help all Australians get a novated lease, regardless of where you reside.

The process can be done over the phone and via email. It really is quite simple.

Most novated lease lenders are located in major capital cities like Perth, Sydney, Melbourne, Brisbane, Adelaide and Hobart.

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