novated-leasing

Novated Lease FAQs

Our customer service team welcome your questions because we know that your needs are never going to be exactly the same as someone else’s. However, there are some general questions that we can answer for you now, to give you the basics.

What is a novated lease?

Put simply, a novated lease is a financial agreement between you (the employee), your employer (either government or private) and the company lending you the money to finance your car purchase.

You borrow money from the finance company to purchase your car, and your employer arranges to have your regular lease repayments deducted directly from your salary (this is known as salary sacrificing). These deductions are made from your salary before tax is calculated, thus reducing your taxable income and saving you money.

What are the advantages of a Fleet Network novated lease?

There are many other ways to purchase a car: dealer finance, personal loan, home loan offset or cash payment. But, no matter how good the deal may seem, none of these can offer the additional tax and GST savings of a novated lease.

A Fleet Network novated lease offers advantages to both the employee (the person who will be owning the car) and the employer (who will arrange the salary sacrificing).

For the employee advantages include:

saving GST on the price of the vehicle
saving GST on petrol, maintenance and service costs
reducing taxable income, thus saving money on your tax bill
gaining access to dealerships Australia wide ensuring you get the vehicle of your choice
working directly with professionals passionate about cars – we don’t deal in anything else

For the employer advantages include:

effectively increasing employee salaries with no additional salary costs to the company
raising the value of your company in the eyes of your employees
rewarding the hard work of your employees with minimal effort on the part of the company

Does every employer offer this service?

No. Not every employer is set up to offer employees the advantages of salary sacrificing through a novated lease. However, just because your employer is not set up to offer you this advantage does not mean you cannot purchase a car in this way and enjoy the substantial savings anyway. If your employer does not already offer this facility you can still arrange a novated lease privately through Fleet Network and enjoy all the same savings. Give our team a call on 1300 738 601 and let us help drive your savings.

Can I get a novated lease on a used car?

Yes. You do not have to purchase a brand new car in order to enjoy the advantages offered by a novated lease agreement. However, because a car is a depreciating asset we can only offer a novated lease agreement for used vehicles no more than three years old. This is to protect you and ensure that your car still holds value when it reaches the end of the lease agreement period.

Do I need to use my car for business to save tax?

No, not at all. Even though your company is helping you to buy the vehicle, your car belongs to you as a private purchase.

What sort of car can I get?

Because Fleet Network run independently of any dealership our sole interest is in sourcing you the car you want to drive. There are generally very few restrictions on the type of car you can novate.

Do I have to be the main driver or can I buy a car for another family member?

As the purchaser you are the one who undertakes the repayment obligations and the responsibility for how the vehicle is driven and cared for, but the driver of the car is up to you.

How do I work out my savings?

An automatic saving calculator can only give you a very rough estimate and can sometimes give you an estimate that is not as good as the reality. The only way to get a real quote is to give us a call on 1300 738 601 from anywhere in Australia. Speak to one of our team and let us arrange the best deal on your behalf.

What is the Employee Contribution Method (ECM)?

The ECM enables you to reduce your Fringe Benefit Tax (FBT) by contributing to the costs of running your vehicle with post-tax dollars. Every post-tax $1 you spend towards the running costs of your vehicle (such as the purchase of fuel) reduces the FBT by $1.

Because FBT is calculated at the highest end of the tax bracket, offsetting in this way can often work out cheaper than paying the FBT. Not all employers offer ECM so please check with your employer to see if this is available to you.

I am an employer and I want to offer my employees access to these great savings. How do I arrange it?

Give our team a call on 1300 738 601 from anywhere in Australia and simply explain what you want to do. Our Business Development Manager will guide you through the process. To find out more about the advantages of offering novated lease agreements to your employees go to our Employer information page.

My employer does not have a novated lease agreement but I still want to take advantage of this system. What can I do?

Give our team a call on 1300 738 601 and simply explain the problem. At Fleet Network we can arrange a novated lease agreement for you that gives you all of the advantages and savings even if your employer does not have this system in place.

It sounds good, but my needs are pretty specific. Can you still help?

Yes! We don’t have a “one size fits all” formula that’s why you won’t see any savings calculators on our site. Every customer has unique requirements and we work hard to help every one of them achieve their goal. Give our team a call on 1300 738 601 and let us find the best way to help you into your next car.

I have lost my fuel card. What should I do?

I still have more questions. Is it ok to call again?

Of course! That’s what we are here for. It is most important that you understand how it all works and the best way to get answers is to phone up and ask. Give us a call on 1300 738 601.