non-maintained novated lease

Non-Maintained Novated Lease

Information verified correct on October 22nd, 2016

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.

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


  • 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.


  • 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.

Rates last updated October 22nd, 2016
Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Application Fee Monthly Repayment
IMB New Car Loan
This fixed rate new car loans up to 2 years old features no early repayment penalties
From 6.34% (fixed) 6.62% $2,000 1 to 7 years $199 Go to site More
Beyond Bank Low Rate Car Loan
A great rate for cars under 2 years old.
From 5.69% (fixed) 5.97% $25,000 1 to 7 years $175 Go to site More
CUA Fixed Rate Car Loan
A competitive car loan that offers flexible repayment options and no account keeping fees.
From 7.99% (fixed) 8.29% $15,000 1 to 7 years $120 Go to site More
RACV Car Loans
Enjoy this fixed rate new car loan offer from RACV. No ongoing fees.
From 6.2% (fixed) 6.73% $15,000 1 to 7 years $378 Go to site More
Latitude Personal Loan (Secured)
Can be used for whatever purpose: renovating, buying a car, booking a holiday. Funds can be in your account in as little as 24 hours.
From 12.99% (fixed) 14.2% $3,000 2 to 7 years $250 (Loans under $4000 - $140) Go to site More
RACQ New Car Loan
Apply online and receive a response within 5 business hours.
From 6.2% (fixed) 6.73% $15,000 1 to 7 years $378 Go to site More
IMB Secured Personal Loan
A secured loan from IMB with flexible repayment features
From 7.39% (fixed) 7.67% $2,000 1 to 5 years $199 Go to site More
NRMA Car Loan
Purchase a new car with an NRMA Car Loan with a fixed rate term and no monthly fees.
From 6.2% (fixed) 6.73% $15,000 1 to 7 years $378 Go to site More
St.George Secured Personal Loan - Fixed Rate
Get behind the wheel of your perfect car with a competitive interest rate from St.George. Get an application response within 60 seconds.
From 8.49% (fixed) 9.39% $3,000 1 to 5 years $195 Go to site More
Bank of Melbourne Secured Car Loan
A low rate personal loan from Bank of Melbourne with variable or fixed option.
From 8.49% (fixed) 9.39% $3,000 1 to 5 years $195 Go to site More
BankSA Fixed Rate Car Loan
Apply for a fixed rate car loan from multi-award winning BankSA.
From 8.49% (fixed) 9.39% $3,000 1 to 5 years $195 Go to site More

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.

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Related Posts

Beyond Bank Low Rate Car Loan "Special Offer"

A great rate for cars under 2 years old.

IMB New Car Loan

This fixed rate new car loans up to 2 years old features no early repayment penalties

CUA Fixed Rate Car Loan

A competitive car loan that offers flexible repayment options and no account keeping fees.

RACQ New Car Loan

A low fixed rate loan from RACQ suitable for buying a new car.

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