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A Novated Lease is an agreement between an employee, their employer and a lender. This type of car loan is most suitable for employees who want to finance their vehicle as part of their salary package.
A Novated Lease is a three-way agreement between a lender, employer, and employee. Under a Novated Lease, an employer purchases a vehicle for the employee and then deducts the loan repayments from their pre-tax salary in the form of 'salary sacrificing'.
Novated Leases have several benefits for both the employer and the employee who enter into the contract. Benefits of Novated Leases for employees include:
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Please note: This is an estimate provided for illustrative purposes only, and is based on the accuracy of information provided. It does not constitute a quote. Additional fees and charges may apply dependent on your individual circumstances. Fees such as early repayment costs and establishment fees are not accounted for in the examples of weekly repayments. Interest rates may be subject to change throughout the term of the loan.
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Read case studyA Novated Lease is a type of car finance for employees who want to purchase a vehicle as part of their salary package. Under a Novation Lease, there are three people who must come together to initiate the loan, and two documents that must be signed.
Read moreAre you comparing car loan interest rates? Read this first. You may be eligible for a lower rate.
Read moreA Novated Lease can result in significant tax benefits for the employee. This is because repayments are taken from the employee's pre-tax salary, effectively lowering their taxable income. If you are considering a Novated Lease, consult a tax professional for specific advice about tax implications.
With a Novated Lease, the employee has full control over the vehicle. Therefore, the employee is usually free to choose the car they desire, regardless of whether that vehicle is new or used. If the employee changes jobs, he/she becomes fully responsible for the car. They either pay it out, sell it or assign the Novated Lease to another employee who works for the same employer. Often the lender and employer can help with reassignment.
Contrary to popular belief, you don't need an exorbitant salary to apply for a Novated Lease. You don't have to use your vehicle solely for work purposes either. Your employer does, however, have to give their consent to such an arrangement. So, the first thing you should do is check with them.
Novated Leases are chosen by a range of workers in a variety of professions, often due to their tax related benefits. If you're considering a loan of this type and you've gained consent from your employer, call us, we'd be happy to answer any further queries you may have.
With a Novated Lease, your employer makes loan repayments (to your lender) on your behalf. The employer then deducts the repayment amounts from your pre-tax salary.
As stated above, the employer must agree to such an arrangement. Both the employee and employer need to sign a Novation Agreement, which outlines their consent. Therefore, for the smoothest approval process, it's worth discussing all the details with your employer first.
With a Fully Maintained Novated Lease, your vehicle's operational costs are included in your salary package. This includes repayment costs, vehicle registration, insurance and petrol. Costs associated with upkeep and maintenance, like servicing or replacement of tyres are also included.
With a Non-Maintained Novated Lease, only the repayment costs are included in the employee's salary package. All other vehicle maintenance and running costs are paid out of the employee's post-tax income. For more information on Fully Maintained and Non-Maintained Finance Leases, speak to a Rapid Finance loan specialist.
Yes. No deposit or 100% finance Novated Lease loans are available. Whether you are eligible for 100% finance, however, may depend on a number of factors. These factors can include your credit history, your choice of vehicle and the amount you intend to borrow.
To get a Novated Lease without a deposit, you will need to demonstrate your capacity to meet all repayments, over the full term of a loan, without difficulty. If you have a complicated credit history or have any queries about 100% finance loans, call us. One of our loan specialists will be happy to answer any questions you may have.
The time between application and approval does vary. So, exactly how long your approval will take will depend on your individual application and situation. It will also depend on the speed at which your employer provides the necessary details.
You can, however, speed up the process by ensuring all relevant documentation is up-to-date and ready-to-go before applying. Complicated financial circumstances can lengthen the process of finding finance and getting approval. Despite this, finance is often still available, even if your credit history is less than perfect.
How much you can borrow will depend on your situation. Everything from your income to the type of car you wish to purchase can impact the amount you are eligible to access.
Of course, as you will be entering into an agreement with your employer, you will also need to discuss with them the amount you would like to borrow.
To get started, you can submit an application on our website. One of our specialist team will get in contact to discuss your Novated Lease options. Alternatively, you can give us a call on 1300 467 274