--- title: Option Of Novated Leasing? description: Option Of Novated Leasing image: http://www.1800approved.com.au/hubfs/blog/blog1-600x257.jpg --- [![1800 Approved Finance Solutions](https://www.1800approved.com.au/hubfs/Logos/1800Approved_dark.png)](https://www.1800approved.com.au) ### [**1800 277 768](tel:1800277768) #### WELCOME TO # Our blogs Our aim is to supply you with the best information that you can be confident in your knowledge when you make an application with us. # [![logo-easter-d](https://www.1800approved.com.au/hs-fs/hubfs/Easter%20Campaign%202022/logo-easter-d.png?width=268&name=logo-easter-d.png)](https://consumer.zink.com.au/v1) ### Other Posts - [COVID-19 proof your business cash flow – with a little help from the government!](https://www.1800approved.com.au/blog/covid-19-proof-your-business-cash-flow) - [$150,000 Tax-write Off — Going, Going, Gone](https://www.1800approved.com.au/blog/tax-write-off-going-going-gone) - [Current combination of events means it's the best time to buy a car](https://www.1800approved.com.au/blog/the-current-combination-of-events-means-its-the-best-time-to-buy-a-car) - [How to protect your credit score during this COVID-19 pandemic](https://www.1800approved.com.au/blog/tips-on-how-to-manage-your-business-cash-flow-0) - [Tips on how to manage your business cash flow— How the stimulus package is geared to help.](https://www.1800approved.com.au/blog/tips-on-how-to-manage-your-business-cash-flow) - [**](https://www.facebook.com/sharer/sharer.php?u=https://www.1800approved.com.au/blog/option-of-novated-leasing) - [**](https://twitter.com/share?url=https://www.1800approved.com.au/blog/option-of-novated-leasing) - [**](https://plus.google.com/share?url=https://www.1800approved.com.au/blog/option-of-novated-leasing) - [**](https://www.linkedin.com/cws/share?url=https://www.1800approved.com.au/blog/option-of-novated-leasing) - [**](http://www.youtube.com/user/?url=https://www.1800approved.com.au/blog/option-of-novated-leasing) ## Option Of Novated Leasing? Posted by [Carlos Fabian](https://www.1800approved.com.au/blog/author/carlos-fabian) on 16 September, 2015 ![novated leasing](http://www.1800approved.com.au/hs-fs/hubfs/blog/blog1-600x257.jpg?width=745&name=blog1-600x257.jpg "novated leasing") **What is novated leasing?** Novated leasing is probably the most interesting option for buying a car when it comes to businesses in Australia,  It is a way for both the business to contribute to the vehicle as well as for the employee to gain his own car after the leasing is over. This way of buying a car can prove to be very cost-effective for both the employer and the employee in many cases with some great tax benefits.   **What is a novated lease?**   A novated lease is a type of vehicle leasing which allows the businesses to lease a vehicle for their employees, with all the responsibilities for the lease, other than the financial ones, lying with the employees themselves. These options are usually offered to the employee in high salary packages. When an employee wants to [lease a car](https://www.1800approved.com.au/car-loans/), the business takes on themselves the paying of the monthly installments instead of the employee, out of his pre-tax salary !!. The employee, basically, doesn’t have to pay, instead, the company managing  the lease takes care of payments instead. This is a very effective way for the employees to get tax benefits on their vehicle, since the payments made from the pre-tax income, and the cost is less after tax.   **How does the novated lease work?**   A novated lease is, in terms, a three way agreement. 1. The financial institution providing the lease, 2. The employer and the employee taking the lease. 3. The employee signs a lease agreement with the finance company, The business for which the employee works takes over all the financial obligations of the lease for the employee. For that, a new agreement has to be signed that is called a “novated agreement”, between the employee and the employer. What is good about this for the employee is that he gets to keep the car after the leasing period is over. He gets the ownership, and the employing company doesn’t have anything to do with the ownership at anytime.   Typically, if the employee leaves the firm, for any reason, the novated part of the lease agreement ceases to be, and the obligations of the lease payments are returned to the now former employee.   **Benefits of novated leasing**   For the employees:   This gives the option to the employees to choose what car they will drive. If a company chooses a car for the employee, then the employee might be unhappy with the company’s choice. This way, the employee is happy that he/she gets to drive any car she wants.   The employee is free to take the car with him, if the employment ceases. He can then pay the lease by himself, or have it transferred to his next firm that he is working with if they are comfortable with novated leasing. And he can do this any number of times, as long as the installments are coming in regularly to the finance company the finance company will accept this. 1. The installments are paid out of the employee’s pre-tax income 2. If the employee leases a car by themselves they can, the costs may be a bit higher. 3. The company only takes on themselves the financial part of the leasing obligations.  For the company: 1.  There is no risk if the employee leaves the firm. 2. The financial leasing obligations are only transferred to the company for as long as the employee is current with the company. 3. If the employee leaves the company, the novating agreement ceases. 4. The obligation of the now former employee to pay the installments.   To sum up, it’s a really interesting  possibility for all with responsibilities for the lease, other than the financial ones, lying with the employees themselves.   for more information about novated leases or if you would like to apply give us a call today we would love to help 1800 277 763 Topics: [Car Loans](https://www.1800approved.com.au/blog/topic/car-loans) [![1800Approved_dark](https://www.1800approved.com.au/hubfs/Logos/1800Approved_dark.png "1800Approved_dark")](https://www.1800approved.com.au/new) #### join our newsletter Keep up with the latest tips #### Financial Services #### Company #### Resources 2008-2026 © Ausloans Pty Ltd Australian Credit Licence # 383 999 - [**](https://twitter.com/1800Approved) - [**](https://www.youtube.com/user/1800approved) - [**](https://www.facebook.com/1800Approved) - [**](https://www.linkedin.com/company/1800approved-finance-solutions) - [**](https://plus.google.com/+1800approvedAu) ![](https://www.facebook.com/tr?id=2099318183729557&ev=PageView&noscript=1) ![](https://www.facebook.com/tr?id=759887617369365&ev=PageView&noscript=1) ![](https://www.facebook.com/tr?id=122106498438777&ev=PageView&noscript=1) ![](https://bat.bing.com/action/0?ti=5128956&Ver=2) [![ClickCease](https://monitor.clickcease.com/stats/stats.aspx)](https://www.clickcease.com) ```json { "@context" : "http://www.schema.org", "@type" : "FinancialService", "address" : { "@type" : "PostalAddress", "addressCountry" : "Australia", "addressLocality" : "Gold Coast", "addressRegion" : "Queensland", "postOfficeBoxNumber" : "4214", "postalCode" : "4214", "streetAddress" : "33 Ereton Dr. Arundel" }, "aggregateRating" : { "@type" : "aggregateRating", "ratingValue" : "4.6", "reviewCount" : "233" }, "areaServed" : "Queensland, New South Wales, Victoria, South Australia, Tasmania, Australian Capital Territory, Northern Territory, Western Australia, Sydney, Perth, Melbourne, Hobart, Darwin, Brisbane, Adelaide, Gold Coast, Canberra, Newcastle, Wollongong, Logan City, Townsville, Geelong, Sunshine Coast, Cairns and Albury/Wodonga", "award" : "Australian Broking Awards - Asset Finance Broker of the Year 2016", "brand" : { "@type" : "Organization", "name" : "1800Approved Finance Solutions" }, "contactPoint" : { "@type" : "ContactPoint", "contactType" : "customer service", "telephone" : "1800277768" }, "description" : "A leading motor vehicle finance broker in Australia since 2008. 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