Everything you need to know when choosing a novated lease provider

If you're thinking about buying a new car but feeling overwhelmed by the various finance options, a novated lease might be just the solution you're looking for.  

It can be a flexible tax-effective option that allows you to salary sacrifice a car through your employer, with lease payments deducted from your pre- and post-tax salary, which could reduce your taxable income and potentially save you money on tax. 

A novated lease allows you to finance a car with the lease payments deducted from your pre- and post-tax salary. Which means you could benefit from tax savings, including by reducing your taxable income. 

Additionally, you could skip the upfront GST on cars valued up to $69,674. Plus, no upfront deposit is required.  

And, if you’re considering an electric car, you could benefit from additional savings, thanks to government incentives such as the EV Discount.  

When you take out a novated lease for an eligible EV (i.e. EVs valued under $91,387 as of July 1, 2024, first held and used after July 1, 2022), you can pay for your electric car lease entirely with your pre-tax salary.  

This could mean scoring a Tesla Model 3 for almost the same cost per week as a Mazda CX-5 if you take advantage of the EV Discount with a novated lease. 

Make sure the quote you receive is clear and includes all the relevant details.  

A good, novated lease provider will break down the car’s price, including the budgeted running costs, the regular car payments and related expenses to run the car such as fuel (or charging if it’s electric), maintenance, tyres, insurance and registration.  

Providers should also outline how much of your regular payment comes from your pre-tax income to help you understand your potential tax savings.  

Oly ensures all communication is straightforward and jargon-free, enabling everyone to understand their financial choices and make decisions without confusion. 

With a novated lease, most of your on-road costs can be bundled into the regular automatic payment.  

A good provider will work with you to ensure you’ve budgeted the running costs, and help make it clear that these costs are accounted for as they can add up quickly over the life of the lease. Oly offers an online running-cost calculator, helping you to easily understand how much your car is costing you – you might be surprised by the total!   

One of the main advantages of a novated lease is that part of your lease payment is deducted from your pre-tax salary, potentially lowering your taxable income.  

By splitting payments between pre- and post-tax salary, you reduce the risk of fringe benefits tax (FBT).  

But what exactly is FBT? 

FBT is a tax on any benefits you receive from your employer that aren’t part of your salary or wages, like a car through a novated lease.  

A good provider will make sure that your pre- and post-tax payments are set up correctly and help you at end of FBT year time. 

A good provider will offer flexible application options tailored to your preferences, with quick response times and clear updates.  

Whether you prefer speaking with a consultant who can guide you through the process or would rather take a self-service approach with an online application, Oly offers both options.   

A great novated leasing provider doesn’t just hand you the keys to your car and leave you on your own. They’ll offer strong customer support and ongoing tools to help you throughout the life of your lease. An easy-to-use app can make all the difference in managing your lease. 

With Oly’s app, you can set up and manage your budget anytime, anywhere. The app lets you track your expenses throughout the lease and provides detailed running cost breakdowns that you can adjust anytime.  

It’s also important to know what happens at the end of your lease. Oly will get in touch with you before your contract ends to guide you through your options. These might include: 

1. Upgrading and taking out a new lease  
    

2. Extend your lease by refinancing the residual amount (the balloon payment you owe at the end of your lease)  
    

3. Keeping the car by paying outright the residual amount (conditions may apply). 

When choosing a novated leasing provider, it’s also important to consider their experience and reputation. 

Opting for a provider with a proven track record gives you peace of mind that you're working with a reliable and knowledgeable provider who understands the complexities of novated leasing.  

Oly is backed by McMillan Shakespeare Group (MMS), one of Australia’s leading and most trusted novated leasing companies, with more than 35 years of experience.  

Oly loves novated leases and believes they should be available to everyone, whether you work for a tiny business or a medium one.  

Oly is here to demystify novated leasing, turning what was once a brain-buster into a no-brainer. 

Oly partners with a wide network of car dealers, including popular brands such as BYD and Hyundai, making it even more possible to get behind the wheel of your dream car.  

Get started today and discover how an Oly novated lease can work for you. 
 
Disclaimer  

T&Cs apply. This general information doesn’t take your personal circumstances into account. Consider whether this information is right for you before making a decision and seek professional independent tax and financial advice.

Conditions and fees apply, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your organisation’s approval. Oly may pay and/or receive commissions in connection with its services.