Get the Finder app 🥳

Track your credit score

Free

Non-Maintained Novated Lease

A non-maintained novated lease can help you get into a new or used car. Novated leasing is a convenient loan option, and we’ll soon find out why.

Updated

Fact checked

We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.

Novated leasing is a loan which involves an employee, employer and financier. A car lease is taken out by the employee with the employer taking on the financial obligation. Under the agreement, the employer will make monthly payments on the employee’s behalf through a salary sacrifice.

As a non-maintained novated lease, the employee would then take on the costs of maintaining the vehicle. That includes budgeting for the maintenance and other running costs. In other words, the employer’s only obligation would be to finance the vehicle. A fully maintained novated leave is when the employee doesn’t need to fork out these costs.

Although GST is not paid up front, it will still be charged on monthly payments and the good news is that this can be claimed as a tax deduction.

How does a non-maintained novated lease work?

As mentioned, the employer will finance the lease while the employee takes on responsibility for the car. The employee will not receive any extras and the costs of fuel, tyres, servicing, insurance and more will all be handled by the employee. These costs are handled by the employee’s post-tax income.

This lease can be used to acquire both used and new cars with a value of more than $10,000 but is not payable upfront. Instead, it will be charged on the monthly payments making it a claimable tax deduction.

This type of lease can be beneficial to both the employees and employer. The employer gets to enjoy reduced administration costs, which can be high with company owned cars. Should the employee leave that place of work, the novated lease and all financial obligations cease to be assumed by the employer and are reverted to the employee. The employee therefore can retain equity accumulated by the vehicle.

Related reading: Learn about fully maintained novated leases

Novated lease calculator

The calculator below will let you calculate and give you an indication of repayments and how much the lease may cost you. Once you have an idea of financial commitments, compare your figures with the car loans compared below

How to compare non-maintained novated lease

  • Fees. Different financiers will have different fees for borrowers. Before you take on a lease, find out what the applicable fees are and how they compare to other financiers in the market.
  • Running costs. What are the running costs you will have to bear and how do they compare to that of a maintained novated lease? For the employer, the costs are less since the employee will have to maintain the costs. However, there is good news and that is all running costs are normally pre-tax.
  • Interest rates. Can you get better interest rates on your lease? That is always a possibility. Compare the different interest rates offered by different providers before you take on any lease.
  • Features. There are different features that are offered with novated leases. You can get fleet discounts, regular payment structures and much more even with a non-maintained lease. Compare features to get the most suitable for you.

Pros and cons of non-maintained novated lease

Pros

  • Flexibility. This type of car lease gives you flexibility on different levels. For starters, you can select the car of your choice so long as its value is above $10,000. The car also doesn’t have to be used solely for business and when the employee leaves employment, they take on the financial obligations.
  • Tax deductions. This lease comes with good tax benefits. You don’t have to pay GST on the purchase price and repayments are all pre-tax.
  • Reduced administration costs. With company cars, you would not only need to bear the cost of purchase, but also maintain, insure and undertake any more costs associated with the car.

Cons

  • Expensive. Generally, leasing costs a lot more than a loan. There are higher charges and the payments are always ongoing, meaning that you pay more than you would on a car loan.
  • Freedom. You don’t have the freedom to customise the car in a permanent way.

Things to be cautious of

  • Going overboard on distance.
    Distances or kilometres is often limited and it’s important that you maintain the mileage that is indicated on your contract. If you drive more than your indicated mileage, you may be fined for excess mileage per extra mile. However, you don’t have to underuse the car since you will not get credit for any miles that are unused.
  • Customising the car.
    It is generally a good idea not customise a leased vehicle as you may be charged extra.
  • Poor maintenance.
    Just because the car is leased doesn’t mean that you can get away with poor maintenance. The car must be in good condition and you may be charged excess for wear and tear.
  • Not comparing.
    When choosing and comparing vehicle options for your business, it is always a good idea to compare a range of finance options and lenders. The table below can help with your due diligence.

Car loan comparison

It is always important to compare your finance options from a range of lenders. The below table will give you an idea of the rates and fees for car loans in Australia.

Data indicated here is updated regularly
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Service Fee Monthly Repayment
IMB New Car Loan
4.99% (fixed)
5.34%
$2,000
1 to 7 years
$275.12 ($250 Application fee + $25.12 PPS registration fee)
$0
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 that's up to two years old.
Loans.com.au - New and Dealer Used Car Loan
From 4.67% (fixed)
5.22%
$5,000
3 to 5 years
$400
$0
You'll receive a fixed rate from 4.67% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment. Note: Settle the loan before 30 November 2020 and enter the draw to win a $1,000 fuel voucher. Terms & conditions apply.
Stratton Finance New Car Loan
From 4.05% (fixed)
5.63%
$10,000
3 to 7 years
$700
$8.25
You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $250,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Credit Concierge Car Loan
From 4.45% (fixed)
5.29%
$10,000
1 to 7 years
$350
$5
You'll receive a fixed rate of 4.45% p.a. with a comparison rate of 5.29% p.a.
Get access to over 20 providers to fund a new or used car.

CUA Secured Fixed Car Loan
6.79% (fixed)
7.16%
$5,000
1 to 7 years
$265 ($175 Establishment Fee + $90 Security Administration Fee)
$0
You'll receive a fixed rate of 6.79% p.a.
A secured loan with a high maximum borrowing amount up to $100,000. Redraw facility and no monthly fees.
NAB Personal Loan Unsecured Fixed
From 9.99% (fixed)
10.88%
$5,000
1 to 7 years
$150
$10
You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% (13.56% comparison rate) or less. See Comparison rate warning in (i) above.
Symple Loans Personal Loan
From 5.75% (variable)
6.47%
$5,000
1 to 7 years
from 0% to 5% of the loan amount
$10
You'll receive a personalised interest rate from 5.75% p.a. to 21.99% p.a. based on your risk profile
Borrow up to $50,000 to pay for what you need.
NRMA New Car Loan
From 4.99% (fixed)
5.69%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 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.
Plenti Car Loan
From 4.89% (fixed)
5.44%
$10,000
3 to 7 years
from $249 to $799
$0
You'll receive a fixed rate from 4.89% p.a.
Borrow up to $100,000 with a Plenti Car Loan and benefit from no early repayment or exit fees.
Driva Car Loan
From 4.34% (fixed)
5.5%
$2,000
1 to 7 years
$295 (Varies by lender, starting from $295)
$10
You'll receive a fixed rate from 4.34% p.a.
Borrow up to $250,000 with loan terms from 1 to 7 years. Get access to a range of lenders.
NRMA Used Car Loan
From 6.49% (fixed)
7.19%
$5,000
1 to 7 years
$499
$0
You'll receive a fixed rate from 6.49% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
Latitude Personal Loan (Secured)
From 6.49% (fixed)
7.75%
$3,000
1 to 7 years
Loans under $5000 - $140
$13
You'll receive a fixed rate between 6.49% p.a. and 19.49% p.a. based on your risk profile
Lock in a competitive fixed rate when you offer security. Loan can be used for any purpose and repayments are flexible.
loading

Compare up to 4 providers

How to apply for non-maintained novated lease

Before you can apply for a non-maintained novated lease, first compare the options that are available from different lenders.

This lease is eligible for all employees as it is offered as an option with their salary package. The application will involve the employer who will take on the financial obligation as well as the employee who will take on all running costs and maintenance.

More guides on Finder

Car Loan Offers

Important Information*
Logo for IMB New Car Loan
IMB New Car Loan

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.

Logo for Beyond Bank Low Rate Car Loan "Special Offer"
Beyond Bank Low Rate Car Loan "Special Offer"

You'll receive a fixed rate of 4.89% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.

Logo for RACV New Car Loans
RACV New Car Loans

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.

Logo for NRMA New Car Loan
NRMA New Car Loan

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

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site