What happens if I change jobs?

As an employee with a novated lease, if you change your job or stop working, the responsibility of the novated lease remains with you. You will either need to make sure your new employer is happy to continue a salary sacrifice arrangement with your lease provider or make sure you can continue the repayments out of your own pocket. Even if you wanted to end the novated lease agreement you'd still need to pay off the cost. This means paying the remaining balance in full.

Can I novate‑lease a used car?

It is possible to take out a novated lease for a used car, but you'll need to check with individual leasing providers. There may also be restrictions on the cars that can be leased, such as age limits of the vehicle.

How does the residual value work?

The residual value is a large lump sum payment that comes at the end of the novated lease term. The ATO requires it to be calculated a certain way. The ATO says that the total cost of the lease repayments must only cover a certain portion of the estimated value of the car at the end of the lease. The longer the lease, the lower the residual value. For example, you have a novated lease for 5 years and your car is expected to be worth $20,000 by that time. For leases of 5 years the ATO says the residual value must be 28.13% of the estimated value. In this case, your residual value would be $5,626. ATO residual value percentages: Year 1 65.63% Year 2 56.25% Year 3 46.88% Year 4 37.50% Year 5 28.13%

Can self‑employed get a novated lease?

No, self-employed car buyers cannot get a novated lease. Novated leases are salary-sacrificing packages for employees with salaries. Part-time salaried employees would need to speak to their employer about whether the option is available to them.

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