A novated lease, salary packaging or salary sacrificing… it’s all essentially the same! A novated lease is the smart option to consider when purchasing your next car. It is an agreement between you, your employer and a financial provider where you ‘lease’ your vehicle and your employer is responsible for making your repayments out of your pre-tax salary. It allows you to have the running costs, such as fuel and servicing, deducted in the same repayment and some employers will even allow you to claim back the GST on those same costs. This means you receive more take-home salary compared to those who take our traditional finance options (like a bank or credit union). There is flexibility with a novated lease – depending on value versus payout figure, you can upgrade your vehicle at any time during the contracted period or at the end you can ‘pay out’ the contract and own your vehicle.

How can I realistically save?

In the table below, you can see an example calculation where a new 2014 Nissan X-TRAIL ST (FWD, wagon, petrol, automatic) can be purchased using a lease term of five years with kilometres based on 15,000kms per year. Using this example, this brand new X-Trail can be owned for less than $200 per week and you can save more than $15,000 over a five year lease. Not on $85,000 per year? That’s OK – Fleet Network can work with almost any salary range.

Description Not Packaging Packaging using Employee Contribution Method
Annual Salary

– Less motor vehicle

– Less FBT

– Less GST on employee contribution

– Less luxury car charge

+ add input tax credits

$85,000.00

$0.00

$0.00

$0.00

$0.00

$0.00

$85,000.00

$7274.04

$0.00

$540.00

$0.00

$1201.32

Taxable salary $85,000.00 $78,387.28
Tax (inc. Medicare)

Net salary pre employee contribution

Employee contribution (vehicle)

$20,672.00

$64,328.00

$13,214.04

$18,198.68

$60,188.60

$5940.00

Net Cash Salary after ITC $51,113.96 $54,248.60
Fortnightly all inclusive costs of salary packaging with GST input tax credits $482.80
Fortnightly reduction in take home pay after tax with salary packaging $387.67
Net Packaging Benefit per year* $3,134.64

* The above comparative analysis shows the net benefit gained per annum by acquiring the vehicle with a novated lease agreement versus a private finance agreement assuming the monthly repayments and running costs are the same in both scenarios. Example for illustration purposes only. Based on the purchase of a new 2014 NISSAN X-TRAIL ST (FWD), Wagon, Petrol, Automatic, lease term 5 years, kilometres based on 15,000kms per year. Savings will vary. Terms and conditions apply.

A closer look at novated leases

Lease terms can be anywhere from one to five years depending on what works for you. Each repayment goes towards reducing the total balance on the lease and is automatically deducted from your pre-tax salary. All the running costs (including fuel, insurance, registration, servicing, tyres and maintenance) can be included in the same repayment subject to the lease type you choose. This is especially convenient should any significant repairs be required for your vehicle. At the end of the term you have the option to purchase the vehicle outright, refinance the car with a new lease or sell it. Vehicles obtained with a novated lease attract Fringe Benefits Tax (FBT) which is a benefit provided to employees. This is separate from income tax and is calculated on the taxable value of the benefits provided. Your employer is responsible for paying the FBT during the term of the novated lease. This FBT amount is payable to the government in order to offset any loss of tax revenue from your salary. It is determined based on several factors and is included in the lease calculations.

What are the advantages of a Fleet Network novated lease?

  • Repayments taken from your pre-tax income mean you save on tax and receive a greater take-home salary.
  • Significant savings on the new car purchase price through national fleet pricing discounts.
  • Save GST on the purchase price of the vehicle and its running costs*. (*Subject to Employer policy).
  • Ultimate private use; you choose the car you want and how it’s used but get the benefits associated with a company car.
  • Save time and stress when sourcing and procuring a new car.
  • Gain access to dealerships Australia-wide, ensuring you get the vehicle of your choice.
  • At Fleet Network, you aren’t just another number. Our representatives will work with you from beginning to end, and remain available to you after you’ve received your car.
  • Work directly with professionals passionate about cars – we don’t deal in anything else.
  • Access to a range of exclusive Fleet Network benefits.

Vehicle options and restrictions

Novated leases provide a great deal of flexibility in vehicle choice. However there are a few restrictions, and these apply to:

  • Vehicles in excess of one tonne payload (some of these vehicles are acceptable)
  • Vehicles older than eight years at the end of the lease
  • Vehicles seating more than eight passengers
  • Vehicles without the proper compliance plates
  • Motorcycles Employer company policies need to be consulted as some employers put restrictions on the types of vehicles that can be novated.

Provided you can meet the financial commitments, there are generally no limits on the vehicle purchase price unless your employer has restrictions. In addition to new vehicles, novated leasing is also available for used vehicles. There are certain restrictions on the minimum value to be financed and the vehicle’s age at the end of the lease, but these can be discussed with your Fleet Network consultant.

Types of novated leases

There are two novated lease options available:

  • Novated finance lease: This option only finances the purchase price of the vehicle and excludes all running costs.
  • Fully maintained novated lease: Both the purchase price of the vehicle and its running costs are calculated into the lease.

Which option should you choose?

Each novated lease option has its pros and cons which should be carefully weighed. If you prefer the certainty of having full maintenance coverage, then the fully maintained novated lease would be more beneficial for you. However, if you prefer to manage your own maintenance expenses and would possibly like to purchase the vehicle at the end of the lease, then a novated finance lease would be more ideal.

What happens at the end of the lease?

When a novated lease ends, there are several options available:

  • Pay off the Residual Value amount: Paying off the residual value gives you full ownership of the vehicle. This also means that all repayments end and you become responsible for all running costs.
  • Sell the vehicle: If you decide to sell your car, you are responsible for any difference between the selling price of the car and its residual value. However, any profits made from the sale are yours to keep completely tax free.
  • Refinance the car: If you would still like to continue with a novated lease, you can easily do so by refinancing the car and taking on a new lease. Which option you choose depends on your financial situation and it is in your best interest to seek professional advice to determine which option is best for your needs.

What is the Residual Value amount?

All finance lease agreements include a Residual Value amount which must be paid to the financier at the end of the lease term. The employee has the option to sell the vehicle, but the employee will be liable for any difference between the Residual Value and the sale price of the vehicle. The minimal Residual Value percentages are set by the Australian Taxation Office (ATO), depending on the lease terms. The Residual Value percentages are calculated based on the lease terms and other factors. If you are unclear about any of this, one of our leasing consultants will be able to explain this to you in more detail including what you can expect at the end of the leasing term. For more information, please check our FAQ section.

Can I arrange running costs through my novated lease?

Yes, and Fleet Network recommend you do. In many circumstances, Fleet Network can save you the GST on car related running costs such as fuel, regular maintenance services, tyres and insurance. Because of Fleet Network’s two decades of experience in this industry, we are able to get good prices on these services and can pass those savings onto you.

Why should I arrange to incorporate running costs into my lease?

By incorporating running costs into your lease, you spread the costs evenly throughout the term of the lease. You will no longer have to worry about coming up with the cash to change a tyre, do a scheduled maintenance service or repair, or pay for insurance. Everything is budgeted into the lease and you are making contributions towards your automotive expenses well before they are due. Fleet Network is also able to ensure that the running costs you pay, such as the initial vehicle purchase price, do not include GST* thereby giving you the maximum financial benefit. We are all about saving you money on your next vehicle purchase. *Subject to Employer policy.

How are running costs calculated?

Every driver is different. Your running costs are based on the make and model of your car, the location in which you live, the expected kilometres you will travel as well as the level of insurance, price of fuel and other specific choices you will make. If you overestimate at the end of the lease you receive this overpayment back through your payroll as a cash reimbursement. Conversely, if you underestimate the use of your vehicle it may be necessary to increase the regular payments to make up the shortfall. Give us a call on 1300 738 601 and we will help you calculate your usage.

The next step

Obtaining a novated lease is much easier than you think.

  1. Confirm your employer offers a salary sacrificing option.
  2. Choose your preferred vehicle.
  3. Estimate the number of kilometres you expect to drive per year.
  4. Engage Fleet Network to negotiate the best price and for a detailed quote.
  5. Complete your finance application.
  6. We organise your employer to sign the Deed of Novation.
  7. Fleet Network will coordinate between the financier and the dealer.
  8. Your vehicle will be delivered.
  9. Regular deductions will be made from your salary.

Contact Fleet Network today on 1300 738 601 to get started with a novated lease. Our team is here to help answer all of your questions.

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“Jodie and Tim were excellent to work with, they helped me understand exactly what I needed to do and Jodie guided me through the whole experience expertly and patiently.”

Sarah , Dept of Education

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“Everything is going well with my vehicle, I love it. I am more than happy with the assistance that I received during the process and would happily recommend Fleet Network to others.”

Jo-Anne , QLD Dept of Communities

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“This is the third vehicle we have bought from Fleet Network. We keep going back because we get such great service and good value for money from the vehicles we buy. We’ve currently got a Honda Odyssey Luxury, which is a great family car. We always do our own research first and then just call them up and tell them what we want. They source it, give us the price, do all the paperwork and then we just go and pick it up. It’s so simple. The hardest part is choosing the car we want! As to recommending them, anytime we have friends looking for a car we recommend Fleet Network. They’re a good company and everyone we recommend has had a good experience.”

Garry , Department of Indigenous Affairs, Western Australia

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“This is the third car that I have bought through Fleet Network. I change my car every three years and this time I wanted a VW Beetle convertible, my dream car, and there was only one left in Australia. Fleet Network managed to find the car for me and get it sent over from the dealer over east. They were fantastic. They then held onto it for me while I got my other car ready for exchange, a process that was delayed due to hail damage from the storms. There were further delays as things got held up with the insurance company but Fleet Network was brilliant. They kept me up-to-date with everything and waited while I got it all sorted out. I would definitely recommend them. They are really friendly and helpful and everyone I have spoken to has been brilliant.”

Colleen , WA Health, Western Australia

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“Everything great with my new car. Customer service was excellent was a pleasure doing business with your company.”  

Theresa , NT Dept of Health

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“Everything is fantastic with my car and the service I have received was great, can’t thank you enough. Thanks Carole, I do appreciate your follow up. Well, so far everything is ok, if I have any queries I will definitely contact you. The customer service was quite good, I was impressed by consistent and up to date communication throughout the process.”

Memory , NT Dept Children and Families

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“I first started dealing with Fleet Network in 2002 when I got in touch and spoke to Matt. I was a bit wary as I had never financed a car this way before but Matt talked me through everything and put me at ease. I told him the things I was looking for in a car and before I knew it he had arrived with a Toyota Corolla for me to test drive. I tested it, he went through the costs, which were almost negligible, and the car has been going beautifully ever since. It’s been passed through the family but Matt was right, it was exactly what I was looking for and has been a great car. Since then I have bought 3 more cars through Fleet Network. I can’t recommend them highly enough – they are really good people, so friendly and they always follow through on their promises. Everyone I know who has dealt with them has commented that Fleet Network really do care.”

Antonio , Department of Education, Western Australia

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“We have a big family and when we first started dealing with Greg from Fleet Network earlier this year he pushed and pushed to get us into a car big enough for us all and one that would work within our budget. He just wouldn’t give up! We now drive a Hyundai iMax, which is perfect for us. We rang him up so many times with questions but nothing was ever a hassle for him. When Greg went on holiday and Jodie took over it was exactly the same – they were phenomenal. They really did go above and beyond what they had to do in order to help us. Would we recommend Fleet Network? We already do recommend them, to everyone. They have been just so friendly and helpful and worked so hard for us. We can’t thank them enough.”

Troy and Karen , State Government Employee, New South Wales

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“I would like to say a big thank you to Sasha who provided me a very valuable service, she has been very patient, friendly and always providing me up dates on my current vehicle on order. I currently work for defence and as you probably do not know our movements can be stressful at times and have requested to have my vehicle delivered to me before the delivery date of December 12. Even though Sasha has been informed by Holden that the said due date will still occur on December 12, she is trying really hard to have this vehicle delivered to me at the earliest opportunity due to my transfer taking place on December 16. Once again thank you and I am looking forward to doing business with you during the course of my lease through Fleet Network and I will highly recommend your company to Defence and to family members.”

Rudsyn , Defence

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“Thanks Jodie, I would just like to say that you have been fantastic with your help through this whole car process and I really appreciate everything that you have done.”

Donna , WA DOCS

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“Your customer service during the leasing process was outstanding, as it was last time. We would not hesitate to lease through Fleet Network again when our lease is up.”

Jason , WA Education

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“Everything is going very well. The whole process was excellent and I am very happy. Thank you.”

Mark , Army

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“Yes, everything is going great for this vehicle so please thank Frank Agostino, Vicki Scott, Sasha Carruthers and Tammie Maciejak for all their help.”

Craig , WA Health

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“Can I just say that I love driving my new car. Thank you and your staff very much for your assistance. Ann is so looking forward to meeting with you. We are all going to be driving new cars in this office at this rate. Thanks again.”

De , WA Dept of Human Services

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“I’d like to thank you and the Fleet Network team for the professional and friendly assistance I received throughout the process and renewing my car. The whole team ensured I knew everything that was happening and a special thanks to the lady who I signed the final paper work with on the hand over day, she was so nice. I have since mentioned you guys and the service you provide to a few of my friends and hope that if they choose to go down this path then they will certainly be looked after. Once again thank you all so much, I will see you all again at the end of my lease for a new one, apparently my son will have his licence by then and has already claimed my car.”

Shirley , WA Education

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“The vehicle is everything we thought it would be as it’s our third Santa Fe, second diesel. A lot more refined than the earlier model, none the less both Joanna and myself are very happy with it. Right from the start when we spoke with Tim nothing was too much trouble and if there was a query then our contact persons were only too happy to attend to our questions with the utmost professionalism and courtesy. I have passed on to other staff members your company name and hopefully they will be in touch with yourselves in the future.”

Phil , Corrective Services

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“I would like to say a very big thank you to Sean and Sherren for providing me with really outstanding customer service.”

Karen , WA Transport

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“Sasha at Fleet Network was exceeding professional and is really looked after me extremely well!!! My first contact was with Steve Asher and then Frank rang me and worked towards satisfying all my requirements! Would highly recommend them to anyone, which I have already done on three occasions already!”

Kevan , Qld Education