Lease / Novated Lease
A Novated Lease is a type of motor vehicle loan that allows a business to lease a motor vehicle on behalf of an employee.
Features of a Novated lease:
- All repayments and other costs associated with the car are paid by the employer using the pre-tax salary of the employee; therefore reducing the employee's taxable income
- It is commonly offered to staff as an alternative to purchasing a vehicle for work
- After the lease expires, the staff member must return the vehicle to the lender (finance company) or purchase the vehicle by paying the residual.
- If the employee ceases employment with the company who took out the lease, or the lease agreement ends, that employee must then take on all the lease payments themselves