Self-Managed Novated Lease – How To ‘DIY’ & Save | Novated Lease Australia

Self managed novated lease

If your employer has a nominated salary packaging provider you’re required to use, you may still have the flexibility to find a great deal on your novated lease. This option is known as a self-managed novated lease.

With a self-managed arrangement, you can source competitive vehicle pricing and finance through an independent provider while your employer continues to manage the payroll deductions through their existing salary packaging partner.

At Novated Lease Australia, we’ll guide you through the process step-by-step, ensuring your arrangement remains fully compliant with your employer’s and salary packagers' policies, as well as the Australian Taxation Office (ATO) requirements, while helping you secure the best possible value on your lease.

How does a self-managed novated lease work?

With a self-managed novated lease (sometimes called a third-party finance lease), an employee sets up the finance for their lease separately from the company that provides salary sacrificing services to their employer.

Usually, this involves using a specialist novated lease provider to assist with the finance on the lease, potentially allowing the employee to secure better finance terms with lower costs. The novated lease provider can also help you source the vehicle and will provide you with estimates only on the running costs.

Once the lease documentation has been finalised, it is your role to instruct the salary packager to commence deductions for your novated lease. The salary packager will determine the final running costs when setting up the novated lease and will be responsible for the ongoing management and administration, which involves deducting the regular amount from your pay and remitting payments.

The role of the Salary Packager vs NLA in a self-managed novated lease

Role	Core Function (Salary Packager)	Core Function (Novated Lease Provider - NLA)
Concept	The 3-way arrangement that allows an employee to use their pre-tax salary in exchange for benefits.	The specialised finance arrangement for the vehicle itself.
Key Activity	Manages the ongoing payroll administration for the employer. This includes deducting the salary sacrifice amount, managing GST claims, FBT reporting, and remitting payments to the financier.	Arranges the finance (the lease) and sourcing of the vehicle only. NLA acts as the intermediary to secure the finance terms and pricing on the car.
Client Relationship	Has the primary, ongoing administrative relationship with the employer.	Has the consultative relationship with the employee to set up the finance and car purchase.
In the case of a Self-Managed lease, the role of the Salary Packager and the Novated Lease Provider are different.

The role of Novated Lease Australia in a self-managed novated lease

Novated Lease Australia’s key responsibilities include:

Securing Finance and Sourcing Cars: Calculating the novated lease finance costs, shopping around for lease finance among multiple specialist lenders, and helping the employee find a car by leveraging relationships with dealerships to negotiate the price.
Initial Education: Explaining the benefits of a novated lease, helping a customer maximise their tax benefits, including advising on FBT exemptions (e.g. for electric vehicles) and advising the customers of estimates only on the running costs.
Set-Up Support: Guiding the customer from the initial quote through to settlement of their lease, as well as providing the final signed novation and lease agreements to provide to their salary packager.
Handling Novation & Lease Agreements: Preparing the novated lease documentation for the employee and the employer's salary packaging provider to arrange signing. In most cases, though, you will need to source the Salary Packager’s agreements or documents directly from them to complete them yourself.