Frequently Asked Questions

The employee and employer sign a novation agreement. The employer makes lease payments on behalf of the employee, deducting the cost from the employee’s pre-tax income.

Benefits include tax savings, reduced taxable income, access to fleet discounts, and bundled payments covering various vehicle costs.

Most permanent employees who pay tax and are past their probation period can qualify. Self-employed individuals generally do not qualify.

Cars, SUVs, and light commercial vehicles are eligible. Motorcycles and heavy vehicles are generally excluded.

Yes, subject to approval by the lease provider and compliance with ATO guidelines.

Yes, novated lease vehicles can be used for both purposes.

Your salary is reduced by the lease payment amount before tax, reducing your taxable income.

Use online calculators or consult a tax advisor. Tax savings depend on your salary, vehicle costs, and lease terms.

GST may apply. Confirm specific details with a tax professional.

Failing to make payments can negatively affect your credit score.

The estimated value of the vehicle at lease end, set by ATO guidelines. It's payable if you wish to purchase the car.

Yes, but this usually involves fees or penalties.

Yes, but expect penalties. Check your lease agreement for specifics.

Some changes may be allowed with approval from the finance provider and employer.

You become responsible for payments. You may transfer the lease to a new employer.

You can often transfer it to a new employer or make direct payments.

This may be possible but requires provider approval.

Yes, but vehicle condition and age limits apply depending on the provider.

Often yes, for items like window tinting or tow bars, subject to approval.

Modifications are typically restricted and require approval.

Typically no; each lease covers one vehicle.

Yes, within ATO guidelines and provider restrictions.

Insurance should cover repairs or replacement. Review policy terms.

Expenses like fuel, insurance, servicing, tyres, and registration.

Yes, typically comprehensive coverage.

Some leases include mileage limits with penalties for excess. Always confirm.

Generally no. Self-employed individuals need alternative finance options.

Consider your tax bracket, job stability, and vehicle use. Consult a financial advisor for tailored guidance.

You would need to pay the difference out-of-pocket or re-finance it if you wish to buy the car. This is why setting a realistic residual value from the beginning is essential.

Yes, some finance providers offer residual refinance options, allowing you to continue paying off the residual over time instead of a lump sum.