Under a novated lease, you can use part of your pre-tax income to finance the leasing of a vehicle. Essentially, it’s a three way agreement between you, your employer and the leasing company where your employer makes the lease repayments while you agree to provide a portion of your salary to cover the vehicle payments and running costs. You may also hear it referred to as salary sacrificing.

1. You choose your dream car and AutoPartners sources a discounted quote from a dealership.

2. We create a forecast of all of your running costs over the life of the lease. This includes things like finance payments, insurance, fuel, servicing and tyres.

3. We then spread these costs evenly over the lease term, in-line with your salary payments. That way you know exactly what your deductions will be and what they’ll cover.

4. Once your finance is approved, your employer makes payments to the financier on your behalf from your pre-tax salary. That way, your income tax is reduced, saving you more over the long term. And because your employer is registered for GST, they claim the GST back from the ATO, passing those savings onto you.

No. In the past, Australian laws did make it more tax effective for those who drove further, but that changed in 2014. Now, the tax benefits for a novated lease are the same for everybody – a flat statutory rate of 20% applies to all car fringe benefits, regardless of the distance travelled.

When comparing the numbers on your AutoPartners quote to any other way of buying a car, make sure you take into account fuel, insurance, servicing, replacement tyres... everything you pay to keep a car running. Also consider the GST-free elements and the income tax benefits. It all adds up and novated leasing is almost always cheaper. It’s always recommended that you seek independent financial advice.

Towards the end of your lease, we will be in touch to help you understand your options and plan ahead. You’ll have a few choices, including:

• Upgrade to a new car

• Extend your current lease term to continue receiving your tax and GST savings

• Offer to buy the car for a nominated price, or

• Ask AutoPartners to help you sell the car through our preffered network at the end of your lease.

You will have several choices giving you full flexibility and you don't have to make a decision until the end of your lease.

If your employment ceases for any reason, you can choose from the following:

Option 1 – Continue the lease by paying monthly payments directly to the finance company

Option 2 – Offer to purchase the car for the Early Termination Price

Option 3 – Transfer the novated lease to your new employer

Option 4 – Ask AutoPartners to help you sell the car through our preffered partner