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A novated lease is a salary packaging arrangement that allows eligible employees to lease a car using a combination of their pre-tax and post-tax salary. The agreement involves three parties: you, your employer, and a finance provider.

Instead of paying for your vehicle’s finance and running costs solely from yourpost-tax salary, your employer deducts your pre-tax portion of the lease repayments and eligible running costs directly from your salary. This can reduce your taxable income while combining many of your vehicle expenses into one regular payment.

Depending on your salary, the vehicle you choose, and how the lease is structured, a novated lease may provide significant tax savings compared with traditional car finance.

How Does a Novated Lease Work?

A novated lease is an agreement between three parties:

  • You (the employee)
  • Your employer
  • Your finance provider

Once your employer agrees to participate in the arrangement, your lease repayments and approved running costs are deducted from your salary each pay cycle.

These costs can include:

  • Fuel or EV charging
  • Registration
  • Insurance
  • Servicing
  • Maintenance
  • Tyres
  • Roadside assistance

Because many of these expenses are paid through salary packaging, you may reduce your taxable income while simplifying your vehicle budget into a single regular payment.

You can also use our Novated Lease Calculator to estimate your repayments and potential tax savings before applying.

a novated lease is mutually beneficially for the employees and the employers

for employees

  • no gst on purchase price
  • no deposit required
  • save on your vehicle running and maintenance costs
  • save thousands in income tax
  • just one easy monthly payment for all your vehicle expenses.
  • take vehicle with you if changing job

for employers

  • cheaper and easier to manage than providing company cars
  • provide a more attractive remuneration package to potential and existing employees
  • no residual risk
  • lower payroll tax and workcover premiums. no surplus vehicles if an employee changes jobs
  • we take care in arranging everything so you can focus on important business matters instead of organising car finance

What Happens at the End of a Novated Lease?

When your lease term finishes, you’ll have several options depending on your circumstances.

You can:

  • Pay the residual value and keep the vehicle
  • Refinance the residual into a new agreement
  • Trade in the vehicle and start a new novated lease
  • Sell the vehicle and use the proceeds toward the residual payment

The best option depends on your financial goals and the market value of the vehicle at the end of the lease.

life changes

if you change jobs, your new employer can take over your lease once a new deed of novation is issued and signed. if you lose your job, you will then be liable for your payments, and you will also have to pay the gst which you may have otherwise avoided.

if you decide at any point that you no longer want your novated lease, you can cancel the lease. you can sell the car to defray costs, or you can pay it off in one lump sum unless your contract states otherwise.

How to Get a Novated Lease

Getting started is simple.

  1. Confirm your employer offers novated leasing.
  2. Choose a vehicle that suits your needs.
  3. Request a quote.
  4. Compare your estimated repayments using our Novated Lease Calculator.
  5. Complete the finance application.
  6. Sign the required documents.
  7. Collect your new vehicle.

use our novated lease calculator to find out how much you could save

Choose your vehicle

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If unsure, the average is 20,000 KMs.
If unsure, the average is 3 years.
Is this a EV/Hydrogen Fuel Cell vehicle?

What Costs Can Be Included in a Novated Lease?

A fully maintained novated lease can combine the cost of financing your vehicle with many of its everyday running expenses, making it easier to budget for your car throughout the lease term.

Depending on your agreement, your novated lease budget may include:

  • Lease repayments
  • Fuel or electric vehicle charging
  • Registration and compulsory third-party (CTP) insurance
  • Comprehensive car insurance
  • Scheduled servicing
  • Repairs and maintenance
  • Replacement tyres
  • Roadside assistance
  • Vehicle management fees

Rather than paying these expenses individually as they arise, an estimated amount is deducted from your salary each pay cycle and allocated to your novated lease budget.

The exact inclusions will depend on your lease arrangement, so it’s important to review your personalised quote before proceeding.

What Should You Consider Before Getting a Novated Lease?

A novated lease can provide valuable tax and budgeting benefits, but it’s important to understand how the arrangement works before making a decision.

Before applying, consider the following:

Your take-home pay will change

Because your lease repayments and eligible running costs are deducted through salary packaging, your take-home pay will be lower each pay cycle. While many employees benefit from potential tax savings, it’s important to understand how the arrangement affects your overall cash flow.

You remain responsible for the lease

Although your employer makes the lease payments while you’re employed, the finance agreement remains your responsibility. If your employment circumstances change, you’ll still need to meet your obligations under the lease.

A residual value applies

At the end of your lease term, a residual value (also known as a balloon payment) remains owing on the vehicle. Before signing your agreement, make sure you understand the residual amount and the options available when the lease ends.

Savings vary between employees

The financial benefits of a novated lease depend on several factors, including your salary, tax position, vehicle choice, lease term and estimated annual kilometres. A personalised quote provides a much more accurate indication of your potential savings than a general estimate.

What Happens if You Lose Your Job?

If your employment ends, you remain responsible for your novated lease repayments.

Depending on your circumstances, you may be able to:

  • Continue making repayments directly to the finance provider.
  • Transfer the lease to a new employer that offers novated leasing.
  • Pay out the remaining finance balance.
  • Sell the vehicle and use the proceeds towards the payout amount.

Some novated lease arrangements may also include optional redundancy or income protection products. Eligibility, exclusions and additional costs may apply, so it’s important to review these carefully before purchasing.

Can You Get a Novated Lease on a Used Car?

Yes. A novated lease may be available for eligible used vehicles, provided they meet your finance provider’s lending criteria.

Eligibility requirements typically include the vehicle’s age, condition, value and the maximum age permitted at the end of the lease term.

Some providers may also offer sale-and-leaseback arrangements for vehicles you already own, subject to valuation and finance approval.

Can You Get a Novated Lease on an Electric Vehicle?

Yes. Electric vehicles can be financed through a novated lease in much the same way as petrol or hybrid vehicles.

Depending on your lease arrangement, eligible expenses may include:

  • Vehicle repayments
  • Registration
  • Comprehensive insurance
  • Scheduled servicing
  • Replacement tyres
  • Public charging
  • Eligible home charging costs

Eligible battery electric and hydrogen fuel-cell vehicles may also qualify for the Australian Government’s electric vehicle FBT exemption, subject to the applicable eligibility requirements.

If you’re considering making the switch, learn more about Fingo’s Electric Vehicle Novated Lease options.

Is a Novated Lease Worth It?

Whether a novated lease is the right choice depends on your individual circumstances.

Many Australian employees choose a novated lease because it can provide:

  • Potential income tax savings
  • Potential GST savings
  • One convenient payment covering vehicle finance and many running costs
  • Easier budgeting
  • Access to salary packaging benefits
  • Potential additional savings for eligible electric vehicles

However, it’s important to compare the total cost of a novated lease with other finance options, such as paying cash or using a traditional car loan.

A personalised quote can help you determine which option best suits your financial situation.

more about novated leasing

Am I Eligible for a novated car lease?

a novated lease is a great way to buy a car and get tax benefits simultaneously.

Five steps to getting a novated lease

novated leases really aren’t complicated. once you know how to apply for a novated lease

How much can I save with a novated lease?

read how a novated lease could save you thousands

Frequently Asked Questions

Yes. Depending on the finance provider's eligibility requirements, you may be able to lease both new and eligible used vehicles. Factors such as the vehicle's age, condition and value may affect eligibility. Fingo can help you determine whether your preferred vehicle qualifies under a novated lease.

Yes. Electric vehicles (EVs) can be financed through a novated lease, and eligible battery electric vehicles may also qualify for additional tax concessions under current Australian Government legislation. Depending on your agreement, charging costs and other running expenses may also be included in your lease budget. If you're considering making the switch, explore Fingo's Electric Vehicle Novated Lease options to learn more.

If you change employers, your new employer may be able to take over your novated lease by signing a new Deed of Novation. If your new employer does not offer novated leasing, responsibility for the lease repayments generally returns to you until another arrangement is made. If you're unsure how changing jobs may affect your lease, the Fingo team can explain your available options.

A residual value, also known as a balloon payment, is the amount remaining on your lease at the end of the agreed term. The residual value is determined when your lease begins and must be paid, refinanced, or settled through the sale or trade-in of the vehicle when the lease ends. If you're ready to upgrade, you may also choose to start a new novated lease.

It depends on your individual circumstances. A novated lease may provide tax advantages, simplify budgeting by combining vehicle finance and eligible running costs into one regular payment, and potentially reduce your taxable income. A traditional car finance solution may be more suitable if you're not eligible for salary packaging. Comparing the total cost and benefits of both options can help you decide which best suits your needs.

Yes, early payout is generally possible, although the available options will depend on the terms of your lease agreement. Additional fees or payout costs may apply, so it's important to request an early payout figure before making a decision. If you'd like to understand your repayments before applying, you can use Fingo's Novated Lease Calculator to estimate your costs.

Yes. One of the key benefits of a fully maintained novated lease is that many everyday vehicle expenses can be included in your lease budget. Depending on your agreement, this may include fuel or EV charging, registration, insurance, servicing, maintenance, tyres and roadside assistance. Using the Novated Lease Calculator can help you estimate your repayments and better understand how these running costs may be incorporated into your lease.

A novated lease can be a cost-effective way for eligible employees to finance a vehicle while potentially benefiting from salary packaging and simplified vehicle ownership.

If you’re ready to explore your options, use Fingo’s Novated Lease Calculator to estimate your repayments and potential savings, or contact our team for a personalised quote tailored to your salary, vehicle choice and lifestyle.