FAQs

Employees and employers must both agree to proceed to set-up a Novated Lease. The credit profile of the employee is not assessed in the application approval process.

Where an employer has credit issues, a higher interest rate may be offered on a Novated Car Lease which would increase repayments and the amount an employee is required to sacrifice.

Businesses with credit issues may need to source specialist non-bank lenders through brokers that approve financing applications with poor credit.

All types of vehicles may be eligible for Novated Leasing – sedans, SUVs, utes etc. The vehicle and the leasing arrangement must meet the Australian Taxation Office salary packaging guidelines.

All interest rates are offered after an individual review and assessment of the application. It may be expected that applicants with a less-than-ideal credit would be offered a higher rate than the lender’s best advertised rates.

Employees with credit problems may benefit from asking their employer to purchase a vehicle for them through a salary sacrificing arrangement. As the employee’s credit profile does not form part of the application review, this arrangement may provide a path to affordable car ownership.

To apply for Novated Leasing, businesses will need to provide income tax returns, BAS statements, annual accounts and other financials.

When all monthly payments and any residual are finalised, the ownership of the vehicle is transferred from the employer to the employee.

Motor vehicle leasing includes an option for a residual in line with ATO rulings.

Not all traditional commercial lenders such as banks, approve bad credit financing. Businesses may need to find specialist non-bank lenders that offer this credit facility. Using a broker can assist with finding the right lender and setting-up the salary packaging arrangement.