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