FAQs

No. Under regulations, salary sacrificing cannot be utilised to finalise a lease residual.

At the end of a lease, lessees may hand the vehicle back to the lender; payout the residual to retain ownership; or refinance the residual.

Where employees seek to retain ownership of the vehicle, they may seek to finance a residual with a Secured Car Loan or an Unsecured Personal Loan.

An employee takes ownership of a vehicle purchased with Novated Lease only after all obligations including the residual are finalised.

Where a residual is financed, the interest rate would be based on used vehicle rates. Where the employee seeks the finance, the rates would be based on personal car loan rates not commercial car rates.

The residual due at the end of a lease is a percentage of the original value as set by the ATO. This is known when the lease is set-up.

When a lease ends, lessees must decide whether to return the vehicle to the lender, make the residual payment out of pre-tax funds or refinance. When the amount is finalised with the lender, the employee takes ownership of the vehicle.

The end of a Novated Lease is when the term concludes, and the residual is finalised.

The lease residual value is a balloon payment due at the end of the term. It is set by the ATO.

When the lessee finalises the residual with the lender, they may then sell or trade-in the vehicle. Arrangements may be made with the lender for the residual to be paid-out after a deal on the new vehicle has been made.