Home > Business Loans > Novated Lease

Novated Lease

A Novated Lease is an arrangement between an employer, an employee and a finance company. The vehicle is purchased by the novated lease provider and leased to you, for set repayments over a predetermined term. The employer will take over responsibility for the 'remitting' these repayments to the novated lease provider on your behalf. The lease repayments and any FBT liability (Fringe Benefits Tax) will be deducted from your pre-tax or gross salary. This will reduce your taxable income and the amount of income tax you have to pay.

A Novated Lease doesn't transfer the liability of the loan to your employer if you leave work the car and the loan repayments will become your responsibility. You may renovate the lease to a new employer or come to another arrangement with the lease provider

Novated Lease Key Features

The Key Features of a Novated Lease are;

  • Finance 100% of the vehicle value, choosing from terms of 1-5 years.
  • Fixed Residual, this residual is set by the lease provider and is calculated using the ATO depreciation guidelines.
  • Repayment Options. Repayments will be made by your employer using your pre-tax salary.
  • Reduce Your Income Tax Obligations. Income tax will be calculated after you have made your lease repayment, resulting in a reduction of the amount of income tax you have to pay. You may still be liable for FBT (Fringe Benefits Tax).
  • Flexibility of use. You are able to use the vehicle for private use.
  • No Fleet Responsibility. Providing employees with a novated lease option frees up the business from having to operate its own fleet of vehicles.

Novated Leases and Security

The Lease provider owns the vehicle. The lease holder will provide their personal guarantee to maintain the lease or rental payments in good order and to either pay out or refinance the residual when it falls due.

Novated Lease Costs

Leasing costs can range from $0 to $350 for establishment and interest rates should be the same a a chattel mortgage or commercial hire purchase or other lease type loans.

Why use Equipfin?

Equipfin is part of the Platinum Direct Finance group of companies who will finance over 800 million dollars worth of Vehicles, TrucksBoats, Equipment and Machinery this year! Due to this volume and buying power, we can give our clients access to the best personal loan rates and financing products across Australia.

Need More Information

Call Us Now on 1300 959 144 or simply email us at [email protected] we will give you an immediate approval indication and have your loan underway in no time at all!

EquipFin Finance