Understanding The Benefits of Novated Leasing

What are the benefits of novated leasing?

Novated lease is a car lease that is common in Australia. This gives a business to lease a car to an employee- who will be using the car. But the payments will be made from the employee’s pre-tax earnings.

Benefits of novated leasing

The topic can be complicated for a new-comer, but there is a great explanation of novated leasing at the 1alp website. There are so many benefits that are associated with novated lease; this also depends on two essential factors namely:

  • The employee’s salary packaging policy, and
  • Employer’s GST status

Financial benefits

If you engage yourself with a novated lease, you will enjoy some more take-home pay; you will be paying for the lease payments, while at the same time taking care of your personal needs. Pre-tax deductions will reduce the employee’s income tax.


You have the sole right to choose the car of your choice, any car that will suit your current lifestyle. Even if you want to choose the latest model or make of car, it is up to you. Your employer can as well help you to make the choice.

Flexible terms- you have the right to choose the number of kilometres you will travel with the vehicle and for how many years you intend keeping the car. If there is a change on your personal issues, you can still adjust the contract to suit you.


Try to choose a car company that offers great car leasing or car financing options to their clients. Some will really treat you so well. Some of these companies have fully experienced and trained consultants that will guide you all through the process.


If you are dealing with a credible car finance or novated lease company, they will ensure that you will not be overcharged during the time of servicing. This is why it is good to be dealing with professional or experienced maintenance controllers.

Employee Benefits

The employee enjoys a lot of benefits by engaging himself or herself with a novated lease. Below are some of them:

Tax advantages

So many private and government employees are using this option to acquire products and services, because it is really flexible enough. You will make an arrangement with a car firm, and then will be making payments to them gradually till the allotted period elapse.


Many companies in Australia offers a wide range of discounted fleet rates for:

  • Car servicing
  • Vehicle repairs
  • Purchasing, and
  • Tyres and many more.

Tax advantages and discounts are major benefits every employer gains from a novated lease. It gives the employee the flexibility to work with ease, knowing full well that he or she can enjoy wonderful car financing options from the employer and the contracted firm.

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