Novated Lease
A novated lease is an agreement between an employer, an employee, and a financier. The employee leases a car from the financier and the employer agrees to take on the employee’s obligations under the lease by paying monthly repayments from the employees pre-tax income.
Novated leasing has become increasing popular over recent year as it delivers some attractive benefits for both employers and employees. The arrangements is commonly known as “salary packaging”.
A Novated Lease enables employers to provide a significant financial benefit to their employees at little to
If the employee ceases to be employed by the employer or the lease agreement ends the employee retains the vehicle but all obligations assumed by the employer under the agreement revert back to the employee.
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There are two main types of novated lease –
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Non-maintained Novated Lease - Where just the vehicle is leased.
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Fully maintained Novated Lease – Where the vehicle and its running coast are wrapped up into the lease.
It is up to the employer whether to offer fully maintained or finance only novated leases.
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