What is a novated lease?
A Novated car lease is a three way agreement between the employer, the employee and the finance company. The basic principles of a Novated car lease are:
- The employee leases the vehicle directly through Car Leasing Options using a standard finance lease agreement
- The employee, employer, and the finance company enter into an agreement that transfers the employee’s obligation to pay the finance and running costs of the vehicle to the employer
- The employer deducts a pre-determined amount from the employee’s pre and post tax income from each pay day. This amount is sent to Car Leasing Options to meet the lease and operating costs associated with the vehicle
- If the employee ceases employment with the current employer, the Novated car lease can be transferred to the new employer
- The employee can drive the car for either business or personal use
- Novated car leasing has Australian Tax Office approval
What is included?
A Novated lease includes the following:
- Finance repayment
- All service, maintenance and mechanical repairs
- Comprehensive insurance
- Annual registration and CTP (if applicable)
- Fuel card
- 24 hour Roadside Assistance
The finance repayment is fixed for the length of the lease. All other costs are budgeted for with our friendly staff able to assist you in establishing your annual kilometers as well as the cost for fuel and servicing. Importantly these budgets can be amended during your lease should your circumstances change, for example you move closer to or further away from work.
What are the benefits of a Novated car lease?
There are a significant number of benefits to using a Novated car lease.
- Reduced annual tax bill
- Finance payments and operating costs are paid before tax thereby lowering your taxable income
- Cost savings on the purchase of a vehicle
- No deposit required or up-front costs
- Significant fleet discounts on new vehicles (greater than dealer discounts) due to our buying power
- Considerable savings with no GST on the initial purchase of the vehicle
- Feet discounts on servicing and maintenance through our network of preferred suppliers
- Fuel card from a choice of suppliers with discounted rates
- Flexibility in the choice of vehicle
- Select your own dealership or access Car Leasing Options’ preferred suppliers
- Full choice of colour, trim and accessories
- Choose your own insurance company
- Convenience and customer care
- One regular payment inclusive of all vehicle associated costs
- Peace of mind as we schedule, monitor and track servicing and tyre replacement for your vehicle
- Accident and claims management (conditions apply)
- Our friendly staff will help you to monitor your kilometers travelled and expenditure on running costs
- 24 hour/365 day on-call customer support
- Smooth out the costs associated with your vehicle across the length of the lease
- Online account and mobile app providing regular statements, reports and other tools to track your account and vehicle running expenses
Can a Novated car lease be used for any vehicle purchase?
Yes, Novated car leasing is a flexible financial tool that can be used to purchase almost any vehicle (ATO conditions apply), and set up to suit a range of different financial situations.
- The vehicle can be new or second hand (age limit does apply)
- More than one vehicle can be packaged at a time (depending on employer policy)
- You can chose the lease term, between 1 to 5 years with the option to extend at lease end
- A currently owned vehicle can also be converted to a Novated car lease or an associate lease
Most passenger vehicles can be leased through a Novated lease agreement. Speak with a Car Leasing Options consultant today to discuss the many options available to you.
Why choose Car Leasing Options?
Car Leasing Options is a company dedicated to ensuring that its customers gain the greatest possible benefit from their lease. The key elements of our approach include:
- A focus on customer care unlike any of our competitors in the market
- 24 hour/365 day on-call customer support
- Fully informed decision-making through no-obligation quotes
- You will always speak to an actual Car Leasing Options representative every time, not an answering service or call centre
- Sourcing vehicles from the widest network of dealerships in the country. With a network of more than 200 dealers means the purchasing power generated ensures that the price of your next vehicle is the most competitive in Australia.
- Using competition amongst dealerships and financiers to negotiate the best possible price on our customer’s behalf
- Car Leasing Options products and services are flexible and tailored to suit your individual needs
- Independence; we see this as an important service offering as it allows Car Leasing Options to tailor a solution that best fits your situation and needs
- Industry-leading technology that has been developed to ensure quick responses to customer enquiries and the fastest possible processing times for applications
What information is required by Car Leasing Options to set up a Novated car lease?
Setting up a Novated car lease is very simple. The basic requirements are a current driver's license, a current pay slip from your employer, and a clear credit reference (CRAA).
Does the car need to be used for business use only?
There is no distinction between private or business use for Novated car lease.
Who can drive my vehicle?
A vehicle under a Novated car lease is regarded as a private car therefore the lease holder determines who can drive the vehicle. Please ensure you are aware of the insurance implications and understand if family members or friends are covered when driving the vehicle.
How long is the lease term?
Lease terms can be between one and five years. The most common lease terms are between three and five years. A lease can always be extended after the completion of the initial lease term and can be rolled over for another term.
What does my tax benefit depend on?
Whilst all employees may enjoy benefits from salary packaging, the level of tax savings per Novated lease depends on three main factors:
- Level of gross income – Car Leasing Options can provide you with an accurate pay-slip analysis so you can see how a Novated lease will effect your pay and lower your income tax
- The purchase price of the car – this determines the amount of pre and post tax costs
- Running costs of your vehicle
How long does the process take and when can I get my car?
Provided the vehicle is available at the dealership and the lease contracts are correctly signed, the vehicle can be delivered almost immediately. We use the latest technology throughout the approval and ordering stages to ensure there are no unnecessary delays and drivers have visibility and know the progress of their vehicle order.
What is a residual and what happens at the end of the lease?
The residual is the final balloon payment due at the end of the lease. At this point you have a number of options:
- Pay out the residual and own the vehicle
- Sell the vehicle and pay the residual with the proceeds and either keeping the additional if you sell it for
- If there is a positive or negative difference between sale price and the residual payment, the customer will either keep the excess funds or pay the difference
- Extend the lease
- Car Leasing Options has a relationship with a well known national vehicle auction house and can arrange for the old vehicle to be disposed of using a hassle free service (conditions apply)
Can I retain my own insurance and road side assist provider?
Car Leasing Options allow you to choose your own insurance and Roadside Assistance providers which we will pay on your behalf as part of the Novated car lease policy. We can also arrange these policies for you through our panel of providers with already negotiated discounts.
Are there any costs not covered by a Novated car lease?
The Australian Taxation Office guidelines state that tolls, parking and infringement fines are not eligible to be part of a Novated car lease.
What happens if I leave my employer?
Your Novated lease agreement can be transferred from your old employer to your new one. Once you commence work, your Novated car lease agreement continues without any disruption to the policy. It is important to let your new employer know of this arrangement in order to prepare for this transfer ahead of time.
How do I track my account with Car Leasing Options?
Car Leasing Options provides its clients with access to their operating account both online and through a mobile app that provides statements, reports, and other useful tools to allow customers to track their account.
Car Leasing Options also distributes a monthly account statement via email allowing the driver to obtain a regular summary even if they don’t have time to check their account online or via the iPhone or Android app.