Fully Maintained Novated Lease
A fully maintained novated lease can provide you with a simple and tax-effective way to afford a car.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
A fully novated lease is becoming a popular source of financing for many Australians seeking to own a car. This method of car financing helps you get a car leased in your name and fully maintained using monthly payments from your salary. Under a fully maintained novated lease, your employer is responsible for your lease repayments and car maintenance expenses, sourcing the money for this from your salary packaging account.
Fully novated leasing takes out the hassle from sourcing a car at a great price. Your employer will usually let you choose the car you want and then help arrange the financing and insurance you need to secure the car.
When comparing vehicle finance options, it's generally helpful to know what monetary figures you are working with. You could use the calculator below to get an idea of the costs involved.
How does a fully maintained novated lease work?
Under a fully maintained novated lease, you enter into a three-way agreement between you, your employer and a financier, where you get to choose a car and have your obligations under the lease taken care of by the employer. This method of financing can suit anyone who wants to own a car, who has a salary package and who drives a significant amount of kilometers each year. The lease will enable you to own a car of your choice, be it new or used, and have it sourced for you so you can use it as part of your salary packaging agreement.
The lease rentals and other operating expenses such as service and maintenance, accident management and insurance, are deducted from your pre-tax salary. These payments are made by your employer on your behalf, but the control of the car and its maintenance remains in your hands.
Related reading: Compare a range of car loan options
How to compare maintained novated lease options
- Repayment flexibility.
Going for a fully maintained novated lease that allows you to make manageable monthly payments other than infrequent lump sum payments can help reduce financial strain especially if you have a low income. Carefully planned lease payments that are simple and convenient will translate into affordable monthly repayments that you can easily service from your salary.
- Fueling flexibility and discounts.
One of the constant operating costs with a car is fuel. A fully maintained novated lease will cover all fueling expenses, but finding a lease agreement where you get discounted rates on fuel and a choice of top fueling stations on your fuel card can be greatly beneficial. It would help to look for such added benefits on your fully maintained novated lease.
- Covered expenses.
Different novated leases will cover you for various operating costs. For instance, most fully maintained novated leases will cover the insurance, registration fees, vehicle payment and other expenses such as accident management and maintenance costs. When comparing novice leases, go for one with a package that offers you the most cover.
Pros and cons
- Potential savings. With a fully maintained novated lease, you get to save more on your car purchase, as your financier may be able to source a car at a better price. You will also reduce the income tax on your salary since deductions are made to your pre-tax income, meaning that you get to keep more cash in your pocket. You will also get to retain any built equity on the car once the lease is complete.
- Saves time. The hassle of sourcing a car and managing the financial process is taken care of by your financier in a fully maintained novated lease, which saves you time and the stress of haggling with car sellers. You could also get quickly approved for financing and get a discount on insurance and other costs.
- Complete car management. A fully maintained novated lease offers you cover for all car operating expenses with regular monthly repayments. You will benefit from pre-authorised maintenance service for your fuel, oil and tyres, accident management and other running costs.
- Limited low-doc availability: People with no regular income such as freelancers and business owners cannot benefit from such a lease agreement.
Things to avoid about a fully maintained novated lease
A fully maintained novated lease may be a quick way to finance a car purchase, but you have to remember that you will be sacrificing part of your income for the lease repayments and maintenance of the car. This can leave you with less money for other needs such as rent and food. If you do not need a car, either because you do not cover that many kilometers for work or are in a bad financial situation, it is better not to take on the extra debt. You should also carefully examine the cost of the car lease, including the tax implications, interest charges and upfront payments that could make the lease more costly.
How to apply for a fully maintained novated lease
A fully maintained novated lease can help you afford a car that you could otherwise not buy with your current salary. Speak to employer to determine whether this option is viable for you.
You may be required to enter the following details:
- Vehicle details. This includes vehicle make and model, build year, where you want to buy it i.e. dealer, auction, private seller.
- Financial details. This includes the lease length you prefer, the vehicle price, and the running.
Contact information. This includes your name, address and phone number, name of your current employer and details of your gross salary.
More guides on Finder
Find the right vehicle for your circumstances with Georgie. Georgie is an Aussie car buying service dedicated to finding the best car for you, at a great price.
2020 Hyundai IONIQ Electric review
If you want a thoroughly practical electric car, the Hyundai IONIQ Electric is one of the most affordable and usable battery-powered models.
2020 Toyota Camry review
Four expert reviews of the Toyota Camry in one
Electric Cars Australia
We've ranked every electric car available in Australia right now.
Mercedes-Benz C-Class review
If you're looking for a premium, luxury or performance mid-size sedan, the C-Class has to be on your shortlist.
2020 Audi Q3 Review
Audi's Q3 received consistently high marks from car reviewers. It's spacious, highly practical, well-designed, a planted ride, reasonable value for money, built to a high standard and it features superb tech.
2020 Hyundai iLoad review
The iLoad is a no-frills, uncomplicated van that'll get the job done.
Looking after your car post-lockdown
After sitting for a while during lockdown, your car might need a little TLC to coax it back into life. Here's how to get it running again!
2020 Subaru XV Review
It's an Impreza-based SUV, with AWD, a trademark Boxer engine, the option of a hybrid, beefy suspension and ground clearance, and a well-reviewed off-road mode.
Our guide to finding and buying a van will help you pick the perfect model for your business.
Car Loan OffersImportant Information*
You'll receive a fixed rate of 4.99% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.
You'll receive a fixed rate of 4.69% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
You'll receive a fixed rate from 4.99% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
You'll receive a fixed rate of 4.99% p.a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.
Ask an Expert