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Novated Lease

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Employers

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Tax Savings

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Novated Lease

What is a Novated Lease?

A novated lease is a vehicle financing option where the lease payments are deducted from your pre-tax income through your employer, offering tax savings and other benefits.

How is a novated lease different from traditional car financing?

Unlike traditional car financing, a novated lease involves a three-party agreement between you, your employer, and a finance company, with lease payments deducted from your salary.

Can I choose any car for a novated lease?

Yes, you can choose any new or used vehicle. Your employer and finance provider will assist you in setting up the novated lease.

What is residual value?

Residual value is the estimated value of the car at the end of the lease term, which you can pay to own the car.

What do I have to do to qualify for a novated lease?

You must be employed with a consistent income and an employer willing to process payroll deductions. Contractors and self-employed individuals aren’t eligible.

Can I get a novated lease on a used car?

Yes, you can get a novated lease on a used car. The process is the same as leasing a new car, except for vehicle ordering.

Can I get a novated lease without an employer?

No, a novated lease requires employer involvement to facilitate salary deductions and payments.

How does a novated lease work in Australia?

A novated lease involves you, your employer, and a car finance provider. Your employer deducts lease payments from your pre-tax salary, reducing your taxable income and providing tax benefits.

What’s included in a novated lease?

A novated lease typically includes vehicle repayments, servicing, maintenance, insurance, fuel, and running costs, though a non-maintained option covers only the finance portion.

Who owns a Novated Lease in Australia?

The finance company owns the vehicle, but it’s registered in your name, and you have the option to own the car by paying the residual value at the end.

What's not included in a novated lease?

Fuel, tolls, and personal modifications are generally not included in a novated lease.

What are the main benefits of a novated lease?

Novated leases offer tax savings, reduced income tax, no GST on vehicle costs, and fixed monthly payments, making it cost-effective.

What other benefits does a novated lease offer?

Additional benefits include access to wholesale vehicle prices, savings on running costs, and a single fixed payment for convenience.

What are the steps to getting a novated lease?

The process includes selecting your vehicle, applying for credit approval, signing documents, and having your employer set up salary deductions.

Do I need to provide any documentation for a novated lease?

Yes, you will need to provide proof of employment, ID, and any required financial documents from the lease provider.

How long does it take to get a novated lease?

The process typically takes a few weeks, depending on approval and vehicle selection.

What happens at the end of a Novated Lease?

You can either pay the residual to own the car, sell it and keep the profit, or refinance the residual with a new novated lease.

What happens if I want to cancel my novated lease?

Cancelling a novated lease may incur early termination fees, depending on the lease terms.

Can you give an example of how a novated lease works in practice?

For example, an employee leases a car through their employer, and the lease payments are deducted from their salary before tax, resulting in savings.

How can I transfer my novated lease to a new employer?

You can transfer your novated lease if your new employer agrees to continue the salary packaging arrangement.

How long does it take to get approval on a Novated Lease?

Novated lease approval can typically be completed in under 4 hours, allowing you to start enjoying your new car quickly.

Can I use the car for personal use?

Yes, you can use the car for both personal and business purposes with no restrictions under a novated lease.

How Do You Ensure Transparency Throughout the Process?

We ensure transparency by guiding you through every step, making sure all costs are clear and terms are fully understood.

What Sets Us Apart from Other Novated Leasing Providers?

We stand out for our customer-focused approach, using technology to streamline the process, ensuring affordability and a hassle-free experience.

Can You Customise Novated Lease Packages to Suit Individual Needs?

Yes, we tailor novated lease packages to suit your unique financial goals and preferences.

Which vehicles are eligible for a novated lease?

New, used, and currently owned vehicles are eligible, as long as they comply with ATO rules. Vehicles with a carrying capacity of more than one tonne or designed for many passengers aren’t eligible.

EV Savings

What costs can I include in my EV novated lease?

You can include lease payments, charging costs, insurance, and maintenance expenses, making your electric vehicle lease financially efficient and manageable.

How do I claim back charging costs on my electric car novated lease?

Charging costs can be included as part of your novated lease agreement, allowing for easy management of your EV operating expenses.

What costs are excluded from an EV novated lease?

Costs unrelated to the car’s operation, such as traffic fines, parking fees, or non-approved modifications, are excluded from your EV novated lease.

How long will the lease term be for my EV?

EV novated lease terms are flexible, typically ranging from one to five years, depending on your preferences and needs.

What will happen when the lease ends for my electric vehicle?

At the end of your EV novated lease, you can either extend the lease, pay the remaining amount to own the vehicle, or upgrade to a new vehicle with a fresh lease.

How much can I save with an Electric Car Novated Lease?

Australians are saving up to $50,000 on their EVs through novated leases, thanks to tax savings, government incentives, and the FBT exemption for EVs under $91,387.

What are the tax benefits of an EV Novated Lease?

A novated lease allows you to use pre-tax dollars for lease payments and running costs like charging, insurance, registration, and maintenance, significantly reducing your tax liability and increasing your take-home pay.

What is a PHEV?

A PHEV (Plug-in Hybrid Electric Vehicle) combines an internal combustion engine (ICE) powered by petrol with a battery-powered electric motor. The electric motor serves as the main power source, while the ICE is a backup when the battery runs low.

What happens with my PHEV lease if I go on parental leave?

If you continue to pay the lease payments and running costs through your salary packaging during parental leave, the PHEV exemption remains in place. However, if you stop the novation agreement and pay directly to the financier, a new novation agreement will be required upon your return, and the exemption will no longer apply.

What happens if my PHEV is replaced due to damage while on an existing lease?

If the PHEV is a total loss and replaced with a like-for-like vehicle, the PHEV exemption will still apply. The new vehicle must be recorded on the existing contract, and all terms, including pricing and end date, must remain the same.

What government incentives are available for EVs?

Government incentives make EVs even more cost-effective, offering FBT exemptions and other financial benefits for electric vehicles, ensuring you save even more on your EV purchase.

How does driving an EV contribute to a sustainable planet?

Electric vehicles produce zero tailpipe emissions, reducing your carbon footprint and playing a significant role in environmental preservation, making your transportation choices more eco-friendly.

What are the ongoing costs of owning an electric vehicle?

EVs offer low running costs, charging an EV is much cheaper than petrol or diesel, and with fewer moving parts, maintenance costs are lower, making it a more affordable option overall.

What are the technology benefits of choosing an EV?

EVs are equipped with cutting-edge technology, including advanced safety features, infotainment systems, and modern enhancements that offer a thrilling and high-tech driving experience.

How convenient is it to charge an electric vehicle?

Charging an EV is simple; just plug it in at home, work, or public charging stations, eliminating the need to visit gas stations and making your charging process as easy as possible.

Employers

What Support Do You Offer Employers Regarding Novated Leasing Arrangements?

We assist employers in integrating novated leases into payroll systems and help explain the benefits to employees, ensuring smooth management.

How do employers benefit from offering a novated lease?

Employers can enhance their benefits package without additional costs to the business. Novated leases increase employee satisfaction, retention, and offer a tax-efficient way to provide a valuable perk.

Is my company eligible to offer novated leases?

Yes, any company that pays employees through the PAYG system can offer novated leases. We assist companies of all sizes, from SMEs to large corporations and government bodies.

What are my responsibilities as an employer offering a novated lease?

As an employer, your primary responsibility is to facilitate salary packaging and manage payroll deductions for lease payments. The administration of the lease, including vehicle selection and lease management, is handled by a third-party provider, making it simple and hassle-free for your business.

What vehicle options are available for employees with a novated lease?

Employees can choose from a wide range of vehicles, including electric cars, fuel-efficient models, and luxury vehicles. This flexibility allows employees to select a vehicle that meets their preferences and needs, making novated leases an attractive benefit.

What’s involved in administering a novated car lease?

Administering a novated lease is simple. Employers need to sign a short novation agreement, set up payroll deductions, and we handle the rest, including reporting and record-keeping.

Do we need to sign a contract?

A short novation agreement is required to make payments on behalf of the employee. Most employers opt for direct debit, and only the usual direct debit terms need to be signed.

Employees

Do I need to be employed to get a novated lease?

Yes, you must be employed and paying income tax through the PAYG system to be eligible for a novated lease. Employees of not-for-profit organisations may also qualify.

How Do You Simplify the Leasing Process for Employees and Employers?

We simplify the novated lease process with expert consultation and seamless integration, providing clear communication and guidance for both employees and employers.

What Benefits Can Employees Expect from a Novated Lease?

Employees enjoy competitive pricing, tax savings, access to a wide range of vehicles, and personalised support throughout the novated lease journey.

Can I have more than one novated lease?

Yes, you can take out multiple novated leases as long as you can afford the payments and enjoy tax savings for each car in your household.

Is there any cost for offering novated leasing to employees?

There’s no cost to the employer. Novated leases come with no admin fees or costs to the business. Employers can help employees save tax for free.

What’s involved in administering a novated car lease?

Administering a novated lease is simple. Employers just need to sign a short novation agreement, set up payroll deductions, and we handle the rest, including reporting and record-keeping.

Do we need to sign a contract?

A short novation agreement is required to make payments on behalf of the employee. Most employers opt for direct debit, and only the usual direct debit terms need to be signed.

What types of cars are eligible for a novated lease?

New, used, or currently owned cars are eligible, provided they meet ATO regulations. Cars must not exceed a one-tonne carrying capacity and must not be designed primarily for passenger transport.

Salary Packaging

What’s included in a novated lease salary package?

A novated lease can include the car, its running costs such as fuel, electricity, servicing, tyres, insurance, roadside assist, and registration. The more you include, the greater your tax savings.

What’s not included in a novated lease salary package?

Some items, such as road tolls, parking expenses, fines, infringement costs, and post-delivery vehicle accessories, are not eligible to be included in a novated lease as per ATO guidelines.

Can I salary package just the running costs?

To salary package the running costs, you need to have a novated lease in place. This means your car must be financed under the lease agreement.

How will salary packaging affect my pay?

With salary packaging, a portion of your salary is deducted before tax each pay cycle, which lowers your taxable income. This means you pay less tax, and the remainder of your salary is taxed as usual.

Am I eligible for salary packaging if I don’t work full-time?

Yes! Whether you’re full-time, part-time, or casual, as long as you pay income tax and your employer offers salary packaging, you can be eligible. Employees earning under the tax-free threshold may have limited savings potential.

Why should I salary package?

Salary packaging allows you to reduce your taxable income, pay for expenses with pre-tax dollars, and potentially increase your take-home pay. You can save on car-related expenses and enjoy more spending money each pay cycle.

What expenses can I include in my novated lease salary package?

You can include the car itself, along with its running costs such as fuel, electricity, insurance, registration, servicing, tyres, and roadside assistance. The more you include, the greater your tax savings.

Tax Saving

Can a novated lease reduce my tax expenses?

Yes, by using pre-tax salary for lease payments, a novated lease reduces your taxable income, resulting in tax savings.

How do novated leases relate to fringe benefits tax (FBT)?

Novated leases may attract FBT if the vehicle is used for personal purposes, though electric vehicles (EVs) may be exempt from FBT.

How can a novated lease benefit someone with a higher income?

High-income individuals benefit from larger tax savings, as the novated lease reduces taxable income, leading to greater savings on both car costs and tax.

What happens at tax time? Does it become more complicated?

No, your group certificate will reflect your reduced taxable income due to salary packaging. You can use the adjusted group certificate for tax filing as usual.

Will I or my employer have to pay FBT as a result of the lease?

In most cases, 100% of the FBT is offset through ECM/post-tax contributions. The only exception is when it’s beneficial for the employee. A leasing specialist can advise on the best option for your situation.

Can a novated lease help me save on tax?

Yes! Novated leases are designed to help you save by reducing your taxable income through salary sacrifice, enabling you to pay for your car with pre-tax dollars.

Will we have a fringe benefits tax (FBT) liability?

We work to ensure a $0 FBT liability for your business, especially if you’re an FBT-rebatable employer. Our FBT reporting saves you the hassle during tax time.

What are the tax benefits of an electric vehicle novated lease?

With EV novated leases, you can enjoy FBT exemptions and other tax advantages, making electric vehicle ownership more cost-effective while reducing your taxable income.

Maintenance

Is maintenance covered under my novated lease?

Yes, your novated lease can cover maintenance, including servicing and tyre replacement, ensuring your car stays in excellent condition without any extra hassle.

Can I include tyre replacement costs in my novated lease?

Absolutely! Tyre replacement costs are included in your novated lease agreement, helping you maintain your vehicle without worrying about unexpected expenses.

What happens if I don’t spend all my allocation for fuel, servicing, tyres, and registration?

Any unused balance in your maintenance account will be refunded to you at the end of the lease.

What are the benefits of including fuel costs in my novated lease?

By including fuel costs in your novated lease, you reduce your taxable income, making it a more tax-efficient way to cover the cost of keeping your car on the road.

Does novated leasing help reduce my vehicle maintenance expenses?

Yes, with a novated lease, you can bundle maintenance costs, including servicing and repairs, into your payments, which helps you save money and avoid unexpected out-of-pocket expenses.

How does a novated lease make car ownership more affordable?

A novated lease bundles fuel, maintenance, and other car-related expenses into one payment, lowering your overall car costs while providing tax benefits and simplifying vehicle ownership.

Comprehensive Insurance

Can I arrange my own comprehensive car insurance policy and roadside assistance?

Yes, you can arrange your own insurance and roadside assistance with your chosen provider. You’ll cover the initial premium upfront, and we’ll reimburse you once enough pre-tax funds are collected.

How do I make an insurance claim?

If you need to make an insurance claim, simply call 1300 001 418, and we will guide you through the entire process.

What types of car insurance can you arrange?

We can arrange comprehensive car insurance for you, along with other necessary insurance products to cover your vehicle during the lease period.

How do I pay for my insurance?

If we arrange your comprehensive insurance, we will automatically pay the premium from your novated lease account when it’s due. Other insurance products are paid up front for the entire lease term.

Can I switch my car insurance policy during the lease?

Yes, you can switch your insurance provider during the lease term. If you do, please let us know, and we’ll update your records accordingly to ensure continuous coverage.

What happens when my insurance renewal is due?

If we arranged your insurance, you don’t need to do anything when it’s time for renewal. If you’re happy with the policy, we will automatically pay the premium from your novated lease account.

Can I modify my car insurance policy during the lease?

Yes, you can modify your car insurance policy during the lease term. Just notify us, and we’ll help ensure your new policy is properly integrated into your novated lease.

Other Requests

How does a novated lease work in Australia?

A novated lease is an agreement between you, your employer, and a car finance provider. Instead of buying the car outright, you lease it for a fixed period, and your employer deducts lease payments from your pre-tax salary, reducing your taxable income and saving you on taxes.

What’s included in a novated lease?

A novated lease typically includes your vehicle repayments, servicing, maintenance, fuel, insurance, and registration. You can also opt for a non-maintained lease, which covers only the finance portion of the vehicle.

What’s not included in a novated lease?

Items like fuel, tolls, and personal modifications are usually not covered in a novated lease.

What other benefits does a novated lease offer?

Novated leases provide benefits such as access to wholesale vehicle prices, savings on running costs, and the convenience of having all car-related expenses bundled into one fixed monthly payment.

How are my payments structured in a novated lease?

Your payments are fixed, so you know exactly what you’re paying each month. Additionally, the higher your tax bracket, the more you can save, as novated leases reduce your taxable income.