Navigating the world of novated leasing can seem complicated—but with the right preparation, it’s a smooth and rewarding process. Whether you’re taking your first steps or finalising the paperwork, it’s crucial to have all necessary details and documents ready before signing on the dotted line. This guide will walk you through a complete novated lease checklist so you can make an informed and confident decision.
1. Understand What a Novated Lease Involves
Before proceeding, it’s important to understand how a novated lease works. In essence, it’s a three-way agreement between you, your employer, and a finance company. Your employer deducts lease payments from your pre-tax salary, helping you save on income tax and simplify vehicle costs. Knowing this structure helps you grasp your responsibilities and benefits clearly.
2. Confirm Your Eligibility
Not every employee is eligible for a novated lease. Make sure:
- Your employer offers salary packaging
- You are employed full-time or part-time (some casual roles may not qualify)
- You’ve passed any necessary probation periods set by your employer
3. Gather the Required Documents
To start the process, prepare the following:
- Valid Australian driver’s licence
- Latest payslips or employment contract
- Proof of residence or visa expiry (if applicable)
- Bank statements (if requested for credit checks)
4. Know the Vehicle You Want to Lease
Choose a vehicle that suits your lifestyle and budget. You’ll need:
- Make, model, and variant details
- Purchase price or quote
- Estimated running costs (fuel/charging costs, rego, insurance, maintenance)
If you’re unsure, Fingo’s leasing specialists can guide you through vehicle selection that maximises your benefit.
5. Understand What’s Included in the Lease
Novated leases typically bundle more than just car repayments. Ask about:
- Fuel/charging cards
- Registration and insurance
- Servicing and repairs
- Roadside assistance
- Tyres This helps you budget accurately and avoid unexpected costs.
6. Review Your Lease Agreement Terms
Before signing, review:
- Lease term (commonly 1–5 years)
- Residual payment details
- Inclusions and exclusions
- Early termination or change-of-job implications
- What happens at the end of lease (return, buy, upgrade)
Make sure you understand your responsibilities should your employment change.
7. Speak to Your Employer or HR Team
Since the agreement involves your employer, ensure:
- They’re aligned on deductions and policies
- The salary packaging provider is authorised by them
- You’re clear on any tax implications from their end
8. Evaluate the Tax and Financial Impact
Although we won’t dive into hypothetical savings here, it’s still vital to:
- Speak to a financial adviser or tax professional
- Review how pre-tax deductions may affect your net income
- Consider long-term affordability
9. Check for Fringe Benefits Tax (FBT) Considerations
Make sure the vehicle you’re leasing qualifies for any available FBT exemptions—especially if you’re leasing an electric vehicle (EV), as this can significantly affect your benefits.
10. Have a Clear Point of Contact
You should know:
- Who to contact for support during the lease term
- Where to access your lease schedule, invoices, and inclusions
- How to track your running costs and remaining benefits
A novated lease can simplify car ownership, reduce out-of-pocket costs, maximise tax savings, and offer a streamlined way to drive your dream car. But like any financial commitment, it’s crucial to go in prepared. Use this checklist as your go-to reference before you sign.
At Fingo, we’re here to guide you every step of the way—whether you need help choosing the right vehicle, understanding your lease terms, or preparing documents. Reach out today to get started.
Frequently Asked Questions
What should I confirm with my employer before applying for a novated lease?
The very first step is to confirm that your employer supports novated leasing. Not all workplaces offer salary packaging, and some only work with approved or preferred providers. Before you apply, check the following with your HR or payroll team:
Employer eligibility
Confirm that your employer allows novated leasing and ask whether there are any internal rules that apply. Some workplaces have minimum requirements for employment status, such as being full time or part time with stable hours.
Probation requirements
Most employers require you to complete probation before starting a novated lease. This is because the lease arrangement is tied to your income and payroll cycle.
Approved providers
Some employers allow you to choose your own leasing company, while others require you to use a specific provider. It is important to know this upfront so you can work with the correct team from the start.
Payroll cycle compatibility
Your lease payments will come out of pre tax income. Ask payroll whether they deduct payments weekly, fortnightly or monthly, as this may affect the way your budget is calculated.
Internal policies
A small number of employers have additional rules, such as limits on luxury vehicles or requirements for certain insurance types. Asking early helps prevent delays later in the process.
Do I need to know exactly which car I want before applying?
You do not need to lock in a specific car immediately. Many people begin the novated lease process while still comparing two or three different models. What matters most is that you understand the general type of vehicle that suits your lifestyle and budget.
A novated leasing specialist can help you compare:
Running costs
Fuel or charging, servicing, registration and insurance can vary a lot between models. Understanding these differences early can help you avoid unexpected costs during the lease.
Future resale value
Some vehicles, especially hybrids and EVs, can hold value differently in the Australian market. Better resale value can lead to a more favourable residual.
Vehicle availability
Popular models in Australia sometimes have long wait times. A provider can help you find a similar or in stock alternative.
Budget and tax benefits
Your leasing specialist can estimate savings, compare repayment options and help you decide whether a new, used or demo vehicle gives you the best result.
If you are unsure about your car choice, it is completely normal to begin your application first and finalise the vehicle later.
What vehicle running costs are typically bundled into a novated lease?
A key benefit of novated leasing is that most of your car expenses can be packaged into one predictable payment. This can remove bill shock and help with budgeting across the year.
Typical inclusions are:
Fuel or EV charging
You may receive a fuel card or charging allowance depending on the vehicle type.
Registration renewals
Your provider can budget for annual renewals so the cost does not arrive unexpectedly.
Insurance premiums
Comprehensive insurance is usually included so you are covered from day one.
Scheduled servicing and maintenance
Regular maintenance, servicing, filters, fluids and vehicle checks are commonly bundled.
Tyres and consumables
Longer leases often include tyre budgets, especially for commuters.
Roadside assistance
Many providers include this because it supports both safety and reliability.
It is essential to read your own lease inclusions so you know exactly what is covered and what is optional.
What happens if I change jobs during my lease?
Changing employers does not automatically end your novated lease. Because the lease is split between you and your employer, you will usually have a few pathways available:
Transfer the lease to your new employer
If your new workplace offers novated leasing, the arrangement can continue with minimal interruption. This is the simplest option.
Convert the lease to a finance lease
If the new employer does not support novated leasing, you can continue the repayments directly. This removes the salary packaging benefit but keeps the lease active.
Settle the lease early
Early payout is possible, although fees or break costs may apply. Your provider can give you a figure before you make a decision.
Before signing a novated lease, it is important to understand what happens if you change jobs unexpectedly. This helps you avoid stress if a career move becomes necessary.
How do I know if my novated lease will trigger Fringe Benefits Tax (FBT)?
FBT applies when an employer provides a benefit for personal use, such as a vehicle. The good news is that recent Australian EV incentives can significantly reduce or remove FBT for eligible vehicles.
Here is what to check:
EVs under the Luxury Car Tax threshold
Battery electric vehicles, hydrogen fuel cell vehicles and some plug in hybrids may qualify for FBT exemption if their price is below the fuel efficient Luxury Car Tax threshold.
Hybrid and petrol vehicles
These do not generally receive FBT exemptions, but the overall tax benefit of salary packaging may still be strong depending on your income and usage.
Employer policies
Some employers may have caps or guidelines regarding FBT exposure. It is important to clarify this with your provider.
Your expected private use
FBT is affected by how much the vehicle is used privately versus for work, although EV exemptions may override this for eligible cars.
Understanding FBT is one of the most important steps before signing because it directly affects your take home savings.