Novated Leasing
Save Money on Your Car Finance with Novated Leasing
Novated leasing is a great way to make significant savings on your vehicle. It is a type of car finance, where your employer pays for your car lease out of your salary.
Get in touch with us now, call 1300 225 525, e-mail novated@financebeagle.com.au or reach out using our online form to get started today.
Save Money on Your Car Finance with Novated Leasing
Novated leasing is a great way to make significant savings on your vehicle. It is a type of car finance, where your employer pays for your car lease out of your salary.
Get in touch with us now, call 1300 225 525, e-mail admin@financebeagle.com.au or reach out using our online form to get started today.
What is Novated Car Leasing Exactly?
A novated car lease allows you to drive the car of your choice while receiving some great tax savings and benefits. You can save thousands on the purchase price and running costs of a new or used car. Novated leasing also offers the convenience of cashless motoring by bundling all the associated vehicle expenses into one payment. You can also get access to discounts not only on the vehicle but also on the associated costs such as fuel, maintenance, tyres, and repairs, making novated car leasing an all-round attractive idea.
How Does Novated Leasing Work?
Your employer pays for your car lease out of your salary through a combination of pre-tax and post-tax salary deductions. Here’s how that works in practice. . .
The employee decides on a car and receives approval. An agreement is setup between the employee, the employer, and the novated car lease provider.
Payments to the novated leasing company are made by the employer, from the employee’s salary.
The employee gets the car they want, saving on tax and running costs, including vehicle price, fuel, maintenance, and tyres.
The car related costs and payments are all managed by the employer, the employee does not have to worry about anything else.
Why Choose Novated Leasing?
Bundled Convenience – All car related costs can be packaged as one easy payment deducted from your salary.
Tax Savings – Your PAYG can be reduced through paying for your car and its running costs through pre and post-tax salary deductions made by your employer.
Reduced Purchase Price – Access fleet discounts on cars to significantly reduce the price of your new vehicle.
Lower Running Costs – Take advantage of discounted fuel, service, maintenance, and tyre purchases.
The Benefits of Novated Leasing
Choose Any Car
Access Fleet Pricing and Discounts
Save on Income Tax
Receive a Fuel Card
Competitive Interest Rates
Get GST Credits
Complete Cost Transparency
Everything Taken Care of For You
Understanding The Tax Benefits and What is Fringe Benefit Tax
Your novated car lease costs are salary packaged, however, under tax law these benefits are considered ‘fringe benefits’, consequently a fringe benefits tax applies to your car. While you take advantage of GST credits and a reduction in income tax, your employer is liable for FBT for offering you the novated lease. This cost is usually passed onto the employee as post-tax payments.
There are two ways to calculate FBT on cars – the Statutory Formula Method, and the Operating Cost Method. Either can be used depending on the situation and, typically, the amount of business use the vehicle in question receives.
Take Advantage of Supercharged EV Savings
The Australian government is trying to incentivise the adoption of electric vehicles by reducing their cost. Electric cars under $89,332 are now FBT exempt. With a novated car lease on an EV, you pay NO FBT, NO INCOME TAX and NO GST on the car and its associated running costs including your lease payments, fuel, insurance, registration, tyres, and servicing.
Novated leasing savings are already significant, but this new legislation takes the game to the next level.
Currently, EV’s are eligible for FBT exemption until mid-2027. PHEV (Plug-in Hybrid Electric Vehicles) are eligible until April 2025.
| Finance Car and Out of Pocket Running Costs | Novated Car Lease – Out of Pocket | Novated Car Lease with FBT Exemption – Out of Pocket | |
|---|---|---|---|
| Example Car | Mitsubishi Outlander | Mitsubishi Outlander Aspire | Mitsubishi Eclipse Cross ES PHEV |
| Car Price D/A | $48,380.00 | $48,380.00 | $49,690.00 |
| Monthly Cost | $1,386.89 | $1,134.50 | $678.23 |
| Weekly Cost | $320.05 | $261.81 | $156.51 |
| Annual Cost | $16,642.68 | $13,614.00 | $8,138.76 |
| Life of Lease | $83,213.40 | $68,070.00 | $40,693.80 |
| % Saved | 18% – Save $15,143 | 51% - Supercharged EV / PHEV savings of $42,510 |
DISCLAIMER: *Based on 15,00km/yr, 5 year lease term and $70,00 annual salary, includes fuel but no EV charging
Why Choose FinanceBeagle?
At FinanceBeagle we are experts at novated leasing as well as all other types of car finance, personal finance and business finance.
The Company
Part of the Motorama Group
A Family-owned and trusted
QLD business for
over 60 years
The People
A team of experts with a wide
range of experience across all
areas of finance will work
for you to ensure you get
the best result
The Solution
We sniff out the best deal for you
no matter your situation by
accessing the best rates
from over 30 of Australia’s
leading financiers
The Service
Your dedicated FinanceBeagle
contact will work for you.
We do all the legwork and use
our expertise to make the
process quick and easy
We can set your business up to offer novated car leasing to your staff as a benefit. Get in touch today and we will assist you with the whole process from start to finish, guiding you through all the steps and helping you understand what will work best for you.
Get in touch with us now, call 1300 225 525, e-mail novated@financebeagle.com.au or reach out using our online form to get started today.
FREQUENTLY ASKED QUESTIONS
Generally speaking, yes, as long as your employer offers novated leasing as a benefit, or is happy to.
You can include pretty much everything. Finance, fuel, registration, comprehensive insurance, roadside assistance, all service and maintenance as well as tyres. Or you can pick and choose.
This is a common misconception that you need to be on a high income. Novated leasing can offer savings for all employees regardless of their income and is simply the most tax effective way to get a car.
No, there are two main types of novated leases: a non maintained, or a fully maintained lease. The difference is one just includes the lease finance costs whereas the other includes all associated running costs of the car bundled into the one payment.
Yes, you can novate a new car or a quality used car through a novated lease and you pick the car you want.
To put simply, yes. A novated lease lets you use pre-tax income to pay for your vehicle repayments, which is a tax-effective strategy not available with a standard loans and the reason you will always save more doing a novated lease than traditional finance.
If you change employers during the lease period, the lease can be transferred to the new employer if they agree to offer this benefit as part of your salary package. Alternatively, you are still responsible for the lease payments they would just continue from your after tax income or you can pay out the lease.
With a novated lease you agree to pay a ‘residual’ which is the amount that remains owing on the vehicle at the end of the lease – to own the vehicle outright. The residual amount is determined at the start of your lease. Alternatively, you can extend the term of the lease for a further period or you can sell the car and use the funds to pay out the residual.