FAQs

If leasing payments are not met by a lessee, the lender has the right to repossess the car.

No. A Novated Lease is in the name of the employer business. Should the employee leave that job, they cannot move the Novated Lease to another employer. All payments would need to be finalised for the employee to take ownership of the car.

Where an employee with a salary packaged Novated Leases has employment terminated, they may need to discuss with the employer how they can pay out the lease to take ownership of the vehicle. If this is not an option, the vehicle may be surrendered to the lender.

Fringe Benefits Tax applies to the personal mileage undertaken in a company vehicle. It is treated as a cost of maintaining a vehicle and would need to be covered by the employee’s salary sacrifice.

Lease payments are fixed and remain unchanged over a fixed term. Other costs can change including rego, insurance and servicing and these changes may impact the salary sacrificing.

Vehicles for salary packaging must meet ATO regulations.

Where an employee chooses to leave a job where salary packaging is in place, they would need to finalise the lease including any early termination fees, penalties and residual.

A residual cannot be paid via salary sacrifice. It may be paid with available funds or refinanced.

Novated Lease terms are negotiated with lenders and can be between 1 and 7 years.

A vehicle leased in a business entity name is registered as a business vehicle.