Novated Lease

Introduction to novated lease

A Novated lease (often referred to as salary sacrifice, car salary packaging and vehicle novation) is a vehicle lease agreement between an employer, employee and a finance company where the employee takes on a lease with a finance company & the employer agrees to take on the responsibility of making the lease payment to the finance company. Ownership of the vehicle is kept by the employee whilst the employer makes the repayments to the finance company & deducts this amount from the employee’s pre-tax salary. If the employee changes jobs the responsibility of making repayments to the vehicle lease becomes the responsibility of the employee.


What are the benefits of a Novated Lease?

For the employee

  • Use your salary’s pre-tax dollars to finance the vehicle therefore a potential for significant income tax savings whilst increasing your disposable income
  • Your choice of vehicle (new or used) from a dealership or through private sales
  • You may claim use of the vehicle for 100% private use
  • The vehicle stays with the employee and may be transferred to a new employer
  • An employee may lease multiple vehicles through the same employer
  • A Novated Lease provides you he option to own the vehicle at the end of term
  • Make rental payments monthly, quarterly, semi-annually or annually

For the employer

  • Improve and add value to the remuneration package you offer your employees easily with without incurring cost to the business
  • The company does not assume any risk for the vehicles
  • A good option in reducing the time and cost of managing a fleet of vehicles
  • Improved the company balance sheet as employee vehicles are “off balance sheet”
  • Relion Finance provide fully compliant Novated Leases and can assist employers wishing to introduce a Novated Lease solution into their company.

The information provided by Relion Finance is not financial advice. We provide information of a general nature only. If you require information specific to your situation please consult with your Accountant or Financial Planner.

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