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- To visit our comprehensive Novated Leasing Beginners Guide click here
- To calculate some estimates on the costs of Novated Leasing visit our Calculator by clicking here.
What is a Novated Lease?
The principle of a Novated Lease is that you as an employee enters into a lease for a vehicle. As part of your salary package, you transfer (novate) your obligations under the Novated lease to your employer, who makes the lease payments. Your employer then deducts the lease payments from your pre-tax salary.
Many people use a Novated Lease as a cost effective means of financing a vehicle.
Custom Fleet offers three Novated Leasing Products:
Features of a Novated Fully Maintained Operating Lease include:
- all vehicle running expenses are incorporated in the lease rental which is paid by your employer from your pre-tax salary;
- fuel and insurance are provided on a budgeted basis;
- at the end of the lease term you can simply return the vehicle to Custom Fleet.
Features of a Fully Maintained Finance Lease include:
- all vehicle running expenses are incorporated in the lease rental which is paid by your employer from your pre-tax salary;
- fuel and insurance are provided on a budgeted basis;
- you have a guaranteed residual value for the vehicle at the end of the lease. This obligation is yours and is not Novated to your employer. This means when you return the vehicle to Custom Fleet (who will arrange for the vehicle to be sold or valued) that in the event that the GST exclusive sale proceeds or valuation (less costs) is less than the residual value, Custom Fleet will invoice you for the difference. You may make an offer to purchase the vehicle at the end of the lease.
Features of a Budgeted Finance Lease include:
- all vehicle running expenses including fuel, insurance, maintenance, servicing, mechanical repairs and tyres are provided on a budgeted basis
- during the lease and at the end of the lease the budgets versus actual costs are compared. If actual costs are more or less than budgeted costs, this amount is invoiced to your employer who in turn pays or passes this amount to you via your salary;
- you have a guaranteed residual value for the vehicle at the end of the lease. This obligation is yours and is not Novated to your employer. This means when you return the vehicle to Custom Fleet (who will arrange for the vehicle to be sold or valued) that in the event that the GST exclusive sale proceeds or valuation (less costs) is less than the residual value, Custom Fleet will invoice you for the difference. You may make an offer to purchase the vehicle at the end of the lease.
If you are interested in offering Custom Fleet's Novated Leasing Services to your employees an you would like to discuss this further please click here.