Frequently Asked Questions

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A novated lease is a vehicle financing arrangement where you lease a car through your employer. The lease payments are deducted from your pre-tax income, providing tax savings and other benefits.
Unlike traditional financing, where you pay for a car outright, a novated lease is a three-party agreement involving you, your employer, and a finance provider, with payments deducted from your salary.
Yes, you can choose any new or used vehicle. Your employer and finance provider will assist in setting up the lease for you.
Residual value is the estimated value of the car at the end of the lease, which you pay to purchase the car.
Yes, a novated lease reduces your taxable income by using pre-tax salary to pay for the vehicle, lowering your tax expenses.
Novated leases may attract FBT if the vehicle is used for personal purposes, though electric vehicles may be exempt.
You don’t own the car during the lease term. However, you buy it at the end by paying the residual value.
Yes, you can also get a novated lease on a used car. We only skip ordering a car as you have found the vehicle you want. The rest of the process remains the same.
No, a novated lease requires employer involvement to facilitate salary deductions.

Salary sacrificing involves agreeing with your employer to forgo part of your salary in exchange for a non-cash benefit, such as a car, which is paid for with pre-tax income.
While both involve using pre-tax income to pay for a car, novated leasing is a specific form of salary sacrificing that includes the finance provider and allows for tax-effective vehicle expenses.
Yes, salary sacrificing can be applied to other items such as laptops, phones, or even superannuation contributions, depending on your employer’s offerings.

Novated leasing is an agreement between you, your employer, and a car finance provider. Instead of buying the car outright, you enter a lease for a fixed period (usually 1-5 years). Your employer deducts the lease payments from your pre-tax salary, reducing your taxable income and saving you on tax.
Your payments are fixed, so you know exactly what you’re paying each month. Plus, the higher your tax bracket, the more you save. Running costs like fuel, servicing, tyres, insurance, and registration can also be included and paid before tax, providing further tax benefits.
A novated lease typically includes your vehicle repayments, servicing, maintenance, fuel, insurance, and more. You can also choose a non-maintained novated lease, which only covers the finance portion of the vehicle.
While the finance company technically owns the vehicle, the employee has the right to use it as if they own it, with their name on the registration. The employee is responsible for the lease payments and vehicle maintenance, but the employer assists by deducting the payments from the employee's salary, offering tax benefits and significant savings.
Fuel, tolls, and personal modifications are usually not included in a novated lease.

The benefits include tax savings, reduced income tax, and no GST on the vehicle’s purchase price and running costs. You also get discounted vehicle prices and fixed payments.
The amount of tax you save depends on your income and the vehicle you choose. Since payments are deducted before tax, you can save a significant amount on your annual tax bill.
Additional benefits include access to wholesale vehicle prices, savings on running costs, and the convenience of having all car-related expenses bundled into one fixed payment.

The steps include choosing your vehicle, completing a credit application, signing the lease documents, and having your employer onboard to manage the payroll deductions.
Yes, you will need to provide proof of employment, your identification, and any financial documents required by the lease provider.
The process typically takes a few weeks, depending on the approval speed and vehicle selection.

Sure! For example, an employee leases a vehicle through their employer. The lease payments and running costs are deducted from their salary before tax, resulting in significant savings on their tax bill.
Higher-income individuals benefit more from novated leases as the tax savings are proportionate to their income tax bracket, allowing for greater savings on both vehicle costs and tax.
At the end of your novated lease, you'll have a lump sum payment known as the 'residual'. This is typically lower than the market value of your car, giving you a few options:
1. Sell the car to pay the residual, keeping any profit tax-free, and either walk away or start a new novated lease on a new car.
2. Pay the residual and own the car outright.
3. Refinance the residual, entering a new novated lease to finance the amount and continue benefiting from tax savings.
It’s a good idea to consult a financial professional for advice tailored to your situation.
Canceling a novated lease may result in early termination fees, depending on the lease terms.
You can transfer the lease if your new employer agrees to continue the salary packaging arrangement.

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