Car Novated Leasing & Salary Packaging FAQs

Does it have to be a new car?

 

No, but it has to be less than 12 years old at the end of the lease. Therefore if you want to lease a car that is eight years old, the maximum lease would be four years.

Leasing new cars is a safer and more preferred option. As a major part of the cost of the lease is actually the running costs, there is often very little difference in the reduction of your take home salary between new and secondhand.

Being a second-hand vehicle you could be purchasing someone else’s problems, for example, the tyres may not be in premium condition when you purchase second-hand and will almost certainly need replacing for more than the lease budget allows.

By purchasing a new vehicle you will receive a new car warranty and a national fleet discount on the purchase price which we pass onto you.

 

What happens if I don’t meet my Kilometres?

 

There is no longer a requirement to travel a set amount of kilometres per year with a lease. If we budget on a set amount of kilometres and you don’t drive them, it just means you haven’t used all the petrol allocated to you and you will build up a surplus of funds in your account. This can be paid back to you anytime you like, but as it came out of your salary before tax, when it gets refunded it must go back through your salary and be taxed.

 

What happens at the end of the lease?

 

You have three options:

  1. You can rollover into a new lease on a new car, we can trade-in your old vehicle or you have the option of selling it privately
  2. You can pay out the residual owing (sort of like paying the deposit at the end instead of the beginning), cease salary packaging and keep the vehicle
  3. You can refinance and re-lease the residual, providing it complies with vehicle age restrictions

 

What happens if I change my job or get made redundant?

 

Your lease is fully portable, subject to the agreement of your new employer.

This would require a new deed of novation between you, your new employer and the financier, but essentially things would carry on as normal. Alternatively you can continue to make the lease repayments from your post-tax salary, or pay out the vehicle. Whatever you choose Fleet Network will guide you through the process and prepare the documentation.

 

Can I use a surplus in my account to pay the residual at the end?

 

Yes, but any surplus in your account has to be paid back to you through your salary and thus be taxed when you receive it – the car must be paid off with post-tax funds.

 

Who can Salary Package?

 

Anyone can package a vehicle if their employer offers this benefit to their staff. All you need to do is ask your payroll department if you are allowed to salary package and then we will liaise with your employer to set it up for you.

 

If you have any other questions about Salary Packaging please call Fleet Network on 1300 738 601 of via our Quote Form. We would be happy to arrange an obligation-free quote or a workplace visit at your convenience. We have more FAQs here too.