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What is a Novated Lease?

Wondering what is a novated lease? We are here to explain it in simple terms for you.

A Novated lease is a salary packaging agreement that enables you to pay for a new or used car and its running costs, from your pre-tax salary.

> Watch our short video to learn more.

Novated lease your way to the car of your dreams

At Fleet Network we help you lease, salary package and save on the car of your dreams and the costs to run it.

How do we do this? Through salary packaging a new or used car via a novated lease. It’s time to say goodbye to regular car loans and say hello to a novated lease – the simplest and most cost-effective way to purchase your new car.

  • Why is a novated lease right for you?

    Want an easy, hassle-free novated lease that’s all inclusive? We’ve got you covered.

    We know you want to spend more time doing the things that make you happy, not budgeting and trying to figure out the things you don’t understand. This is where a novated lease comes in.

    A novated lease includes more than just the finance. Using our novated lease calculator, both the purchase price of the car and the running costs that come with it, are calculated into the lease for you.

    So, you can spend less time budgeting and more time doing the things you love.

    All you car related running costs are covered with a single monthly repayment such as:

    • Fuel
    • Insurance
    • Registration
    • Tyres
    • Servicing
  • How do you obtain a Novated Lease?

    Sound too good to be true? It isn’t.

    Sound complicated? It’s not. In fact, it’s easier than you think and we’re here to help.

    Here’s what you need to do to get your novated car lease:

    • Select your make and model
    • Submit an enquiry
    • Receive your quote
    • Gain finance approval
    • We set things up with your employer
    • Drive away in your new car
    • See? We told you it wasn’t complicated.

    Cars are our passion – let us help you find yours.

    No matter what type of car you’re looking for, where you live, or what you do, we’ll make it our mission to find the car you want, at the best possible price.

    From your novated lease calculator, car purchase and finance, right through to administration and novated car lease payments, we’re here for you. Our expert salary packaging consultants manage the entire process for you, with nothing for you to do but sit back and receive our outstanding service (whilst in your new car of course).

What is Salary Packaging?

Heard your fellow government or company employees mention salary packaging? Not sure what it means? We’re here to help.

Simply, salary packaging uses your gross income for payments to help you maximise your money and pay less tax.

As an ATO approved way of paying for items, with your pre-tax earnings, salary packaging lowers your taxable income and increases your take-home pay, giving you more money in your pocket – winning!

Along with a novated car lease, you can salary package other expenses too (inclusions depend on your employer):

  • Cars
  • Mortgage repayments
  • Rent
  • Superannuation
  • Computers
  • Utility bills
  • Meals and entertainment

Salary Sacrifice your Car

Fleet Network specialises in salary packaging cars via a novated car lease.

A novated lease agreement enables you to pay for a new or used car and its running costs, from your pre-tax salary. By “sacrificing” or “packaging” part of your salary each month to finance the car, you’re actually reducing your taxable income and saving a considerable amount of money.

Check out some real-life salary packaging examples to see how it works.

Sounds pretty good right? Contact us to find out more about a novated car lease today.

How does a novated lease work?

  • It’s a three-way lease agreement between an employee, employer and a leasing provider like us, Fleet Network. This agreement allows government and most private employees to finance a car of their choice and all the running costs that come with it, using pre-tax income.
  • A novated car lease term can be anywhere between 1 and 5 years. Each monthly payment goes towards reducing the balance of your lease. Because each payment is automatically deducted from your pre-tax salary, you won’t need to worry about remembering to make payments.
  • With a novated lease and salary packaging, you’ll receive significant tax benefits compared to financing the car on your own.

How can a novated lease benefit you?

You know what a novated lease is now, but what about the benefits? Let’s take a look at some of the ways a novated lease can benefit you:

Benefits for


  • Reduce your taxable income by salary packaging a portion of your monthly salary toward your novated lease.
  • Gain access to the largest discounts possible, with our big buying power, national presence and strong relationships with manufacturers.
  • No more budgeting for car maintenance and servicing – all running costs form part of your regular salary deductions.
  • Reduce GST – By salary packaging, you won’t pay any GST on the purchase of the car or the running costs.
  • Flexible Terms – From your choice of car to your financial situation, our terms are flexible, to fit your individual requirements.
  • Plenty of options – we provide you with different options throughout your lease term. You’ve come to the end of your lease – Want to purchase your car? Sell the car? Refinance with a new lease? The choice is yours.
Benefits for


  • Show your employees how much you value them – Offer novated lease salary packaging benefits.
  • Open the door to tax bill reductions and salary maximisation – your employees will thank you for it.
  • Your employees will feel valued and appreciated – helping you increase staff retention.
  • All this, at no cost to you.

Ready for the car of your dreams?

We’re ready to help you do it. Check out our novated lease calculator to see how much you can save.

It’s a lot easier than you think! Steps to a Novated Lease

Choose Car
Approve Finance
Employer Set-up
Drive away

Novated Lease Frequently Asked Questions

  • What is a novated lease?

    A novated car lease is a salary packaging agreement that enables you to pay for a new or used car and its running costs, from your pre-tax salary. It’s a lease agreement between an employee, employer and a leasing provider like us, Fleet Network, car leasing Australia.

    This agreement allows government and other employees to finance a car of their choice and all the running costs that come with it, using pre-tax income.

    Sounds pretty good right? Take a closer look at the novated lease benefits here.

  • Can a novated car lease be for private use?

    Yes! One of the many novated lease benefits, is that you can drive the car for 100% private use. The car is personally owned by you.

  • How do employees benefit from novated leasing?
  • How do employers benefit from novated leasing?
  • What does a novated lease cover?

    A novated lease covers not only the cost of your car, but all the associated expenses too. From the lease payments, insurance, registration, and running costs such as fuel, tyres and servicing too.

    No more budgeting headaches – yay!

  • How many kms do I need to drive?

    For novated car leasing Australia, there are no longer regulations on a minimum number of kilometres that need to be travelled and you don’t need to drive a great deal to save a great deal of money. Whether you drive 10,000kms, 100,000kms, less or more, a novated lease will help you save.

    If you budget for a set number of kilometres and don’t drive then, this just means you’ll have surplus funds in your account and these can be paid back to you via your salary at any time you like – bonus! We can also increase your running cost allocations if you think you might do more kilometres than originally expected.

  • What if I change employer?

    If you change employment during your novated lease agreement (these usually last 1-5 years), there are 3 things you can do:

    • Continue with monthly payments – these will need to be out of your own pocket.
    • Re-novate your lease – with your new employer (providing they offer the salary packaging benefit).
    • Pay your lease out early – this means you’ll pay the remaining lease and residual value (GST inclusive). This option entails buying the car outright.
  • Do I have to be a Government Employee?

    Under the impression that you can’t salary package a novated lease because you’re not an Australian government employee? This isn’t the case. Providing you’re given approval from your private employer; you can start looking for your new wheels and then speak to Fleet Network to see how much you can save

  • Are any cars excluded?

    When choosing your car through a novated car lease, there are some exclusions to the type of car you can purchase.

    Common novated car lease exclusions include:

    • Cars in excess of 1 tonne
    • Cars older than 12 years at the end of the lease period
    • Car seating more than 8 passengers
    • Cars without the proper compliance plates
    • Motorcycles


    Some employers may have their own exclusions, so it’s important to check before making your car choice.

    Once your choice is made, we can help you get a quote with our car lease calculator.

  • Anything else I should know about a novated lease?

    Think a novated lease might be right for you?

    Great! We think so too, but here’s what you should ask yourself first:

    • Which car will I choose? Ensure it suits your needs.
    • How long do I plan on keeping the car? Select a novated lease term to match.
    • Do I want to stay on track? Check your account balance and kilometres regularly.
    • Is a novated lease the right choice for me? Speak to a financial consultant first. It’s a big commitment, so appropriate financial advice is advised.
  • My novated car lease has finished – now what?

    At the end of the lease, you can:

    • Upgrade to a new car – trade your old car in and package a new one. Fleet Network can even handle your trade-in for you (all part of our outstanding service).
    • Pay the full amount – paying the remaining amount gives you full ownership of the car. This also means you become responsible for all running costs including insurance, fuel, and maintenance – time to budget again.
    • Sell the car – if you decide to sell your car, any remaining payments will still need to be paid.
    • Extend your lease – keep your current car and refinance the residual value.
  • What is Fringe Benefits Tax (FBT?)

    To offset the reduction in your taxable income when salary packaging, the ATO adds another tax (yes, another one) called FBT on the benefits provided.

    How is FBT calculated? Calculations are based on the car purchase price.

    Want to reduce your FBT? Using the Employee Contribution Method (ECM) employees can partially or fully reduce their car cost with post-tax payments. Contact our friendly team for more information.

  • What is a Residual Value?

    Not familiar with the term residual value? Don’t worry, we’re here to explain.

    A novated lease contains a residual value (balloon amount) which is paid at the end of the agreement. This is an ATO requirement for all novated leases.

    The residual percentages are set in a scale based on the length of the term. In general, the longer the lease, the lesser the residual payment.

  • What is the Employee Contribution Method (ECM)?

    The ECM helps you reduce your FBT when salary packaging. How? By contributing to your running costs using post-tax income. That’s right. Every post-tax dollar you spend towards the running costs of your car reduces your FBT by the same amount.

    ECM is one of the best tax maximising methods there is. Talk to us to find out more.

All salary levels and tax brackets can save tax!

Generally speaking the more money you earn the more you save. Contact us today to get a quote based on your income and see how much you can save.

We are dedicated to getting you the best result