• Novated Lease FAQs

  • Novated myths and misconceptions

    While novated leasing is a very popular option for many Australians, there remain some myths that prevent some employees from choosing it.

    LeasePlan has heard many misconceptions firsthand, and we’ve become adept at setting the record straight when we discuss novated leasing with our customers.

    See common Novated FAQs here:

  • FAQs

    1. Is there a limit to the car I can choose?
    With LeasePlan you can lease a new or used car. You can even access the equity you have tied up in a car that you already own by selling it to us and leasing it back.
     
    You can choose almost any new car, but with a used car we need to make sure your car is no more than 10 years old at the end of the term, and that it has no more than 300,000kms on the odometer at the end of the term. See more details here.
     
    Novated leasing isn't available for commercial vehicles (such as utes with greater than 1 tonne payload, or vehicles that carry 9 or more passengers). 
    2. Do I have to drive a certain amount of kilometres?
    No. In the past, Australian laws did make it more tax effective for those who drove further, but that changed in 2014. Now, the tax benefits for a novated lease are the same for everybody – a flat statutory rate of 20% applies to all car fringe benefits, regardless of the distance travelled.
    3. How do I check for myself that this is a cheaper way for me to get a car?
    When comparing the numbers on your LeasePlan quote to any other way of buying a car, make sure you take into account fuel, insurance, servicing, replacement tyres... everything you pay to keep a car running. Also consider the GST-free elements and the income tax benefits. It all adds up and novated leasing is almost always cheaper. It’s always recommended that you seek independent financial advice. 
    4. What happens at the end of the lease?
    Towards the end of your lease, LeasePlan will be in touch to help you understand your options and plan ahead. You’ll have a few choices, including:
    1. Upgrade to a new car
    2. Extend your current lease term to continue receiving your tax and GST savings
    3. Offer to buy the car for LeasePlan's nominated price, or
    4. Ask LeasePlan to help you sell the car through our auction partnert the end of your lease, you will have several choices giving you full flexibility and you don't have to make a decision until the end of your lease.
    5. What happens if I leave my employer?

    If your employment ceases for any reason, you can choose from the following:

    • Option 1 – Continue the lease by paying monthly payments directly to LeasePlan
    • Option 2 – Offer to purchase the car for the Early Termination Price
    • Option 3 – Transfer the novated lease to your new employer 
    • Option 4 – Ask LeasePlan to help you sell the car through our auction partner
    6. Is my employer eligible?

    Businesses need to be trading for a minimum period of 24 months and have a current Australian Business Number (ABN) to work with LeasePlan. There is also a credit application that needs to be approved before we are able to do business.

    You will need your employer to agree to work with LeasePlan before you can get a novated lease.

    7. What else can I salary package?
    Apart from a car, a range of items can be salary packaged depending on your employer’s policy. Packaging allows you to pay for these items from your salary before tax, lowering your taxable salary and leaving more money in your pocket. Read more
    8. How does the Electric Car Discount Bill help me save more on a novated lease?

    The Treasury Laws Amendment (Electric Car Discount) Bill 2022 passed both Houses of Parliament on 28 November 2022. It provides FBT exemptions on eligible electric (EV) and plug-in-hybrid vehicles (PHEV), as one of the Federal Government’s measures to reduce Australia’s carbon emissions by accelerating the take-up of electric cars.

    • The exemption applies to zero or low emission vehicles valued below the luxury car tax threshold for fuel efficient cars (currently $84,916)
    • This includes battery electric vehicles, hydrogen fuel cell vehicles, and plug-in hybrid electric vehicles (PHEV)
    • It does not apply to vehicles designed to carry 1 tonne or more, or 9 passengers or more
    • While FBT-exempt, the discount amount is still a reportable fringe benefit for tax purposes
    • Exemptions for PHEVs will be phased out from 1 April 2025

     

  • See the numbers

    You can ask us for help or you can get yourself a better understanding of how it works and why it can save you money with our online calculator.