how does it work?
About Novated Leasing
What is a Novated Lease
A novated lease is a specialised financial arrangement in Australia that allows employees to lease a vehicle through a salary packaging scheme. This means that the novated car lease in Australia is facilitated by an agreement where the employer takes responsibility for the lease payments directly from the employee's pre-tax salary. This novated lease meaning reflects a tri-party agreement between an employee, an employer, and a finance company, making it a unique and beneficial finance option for acquiring and maintaining a vehicle.
How Does a Novated Lease Work?
Understanding how a novated lease works is crucial for anyone considering this financial pathway. At its foundation, a novated lease involves three parties: the employee, who selects the car; the employer, who agrees to make lease payments on behalf of the employee; and Novated Finance Australia, which manages the lease and vehicle. This setup facilitates vehicle financing through pre and post-tax salary deductions and covers running costs, offering a comprehensive approach to vehicle leasing.
Here’s how it works →
EMPLOYEE
An Employee chooses a vehicle and enters a lease, kick-starting the lease deals process with a finance company or leasing provider.
EMPLOYER
The employer agrees to make lease payments on behalf of the employee, by signing a deed of novation. These payments are deducted from the employee's pre-tax salary (salary packaging) and then used to cover the lease costs, including the monthly lease payments, maintenance, insurance, and other associated costs.
novated FINANCE australia
Novated Finance Australia is responsible for managing the lease, including vehicle maintenance and administration.
Reasons why people choose a Novated Lease over a Car Loan.
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One of the primary advantages of a novated lease is the potential tax benefits. Because lease payments are made from the employee's pre-tax income, it can result in a lower taxable income, potentially reducing the amount of income tax the employee pays.
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Our novated leases can include rego, CTP, vehicle maintenance, servicing and fuel / charge cards ~ relieving the employee of the responsibility for these tasks. This can help ensure the vehicle remains in good condition and reduce unexpected repair costs.
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Novated leases can provide employees with access to a new or late-model vehicle without the need for a large upfront payment.
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The savings people around Australia are making on novated leases is the real deal.
Here’s why it’s smart to get a Novated Lease for your vehicle →
What are the benefits of a Novated Lease?
Tax Savings
Reflecting on what a novated lease is reveals notable tax benefits, as payments made from pre-tax income reduce your overall taxable income.
one set cost
The predictability of a single cost per pay cycle with a novated car lease in Australia aids financial planning.
UPGRADE YOUR CAR
80% of customers are surprised to hear that their dream car is the same weekly cost as a car they would settle for.
cheaper purchase price
Novated Leasing Australia leverages its network to offer vehicles at competitive prices.
CAR COSTS INCLUDED
Novated leases include fuel, vehicle servicing and registration; lowering unexpected expenses throughout the year.
4 HOUR APPROVAL*
We can get you approved for your novated lease in under 4 hours getting you into that driving seat faster!
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Frequently Asked Questions
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A novated lease integrates employer involvement and pre-tax salary deductions, offering a more tax-efficient and comprehensive vehicle financing solution.
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Eligibility for a novated lease in Australia primarily depends on employment status and employer participation in the scheme.
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A novated lease is adaptable; it can transfer to a new employer or shift to a personal lease arrangement if employment changes.
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While there's considerable flexibility in vehicle choice, specific terms may vary, highlighting the importance of consulting Novated Finance Australia for personalised advice.
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Novated Finance Australia offers comprehensive support from initiation to maintenance, ensuring a hassle-free novated car lease in Australia experience.