Novated Lease
Tax-effective car finance through your salary — quotes via Smart Leasing
A novated lease is one of the most tax-effective ways to get into a car if your employer offers salary packaging. You bundle your car’s finance and running costs into one regular payment that comes out of your salary — a mix of pre-tax and post-tax dollars — which can reduce your taxable income. Car Buyers Assist helps you explore a novated lease and refers your enquiry to our novated leasing partner, Smart Leasing, to prepare a tailored quote.
What is a novated lease?
A novated lease is a three-way agreement between you, your employer and a novated leasing provider. Your employer deducts the lease payments from your salary, so part of the cost is paid from your pre-tax income. It can cover not just the car but the running costs too.
What a novated lease can include
- Finance on the car (new or used).
- Fuel or EV charging.
- Tyres.
- Servicing & maintenance.
- Registration.
- Insurance.
- Roadside assistance.
Electric vehicles and the FBT exemption in 2026
Under the current rules, eligible battery-electric and hydrogen fuel-cell cars provided through a novated lease can be exempt from fringe benefits tax (FBT), which is why EVs are popular for salary packaging. Generally the car must have been first held and used on or after 1 July 2022 and cost less than the luxury car tax threshold for fuel-efficient vehicles.
Plug-in hybrids: from 1 April 2025, plug-in hybrids no longer qualify for new arrangements. A PHEV arrangement that was already exempt before that date can only continue to be exempt where there was a financially binding commitment to keep providing it.
Announced changes: the Federal Government has announced that from 1 April 2027 the full exemption would be limited to EVs costing up to $75,000, with a partial discount for EVs priced up to the luxury car tax threshold. These measures were announced in 2026 and details may change; existing arrangements are expected to be unaffected.
Not every EV qualifies, and an exempt benefit is still reported on your income statement. The value depends on the car’s price, your salary and your employer’s arrangements — our partner will confirm eligibility as part of your quote.
Is a novated lease right for you?
A novated lease generally suits you if you are employed and your employer offers salary packaging, you drive a reasonable number of kilometres each year, and you want your car costs bundled into one simple payment. Whether it works for your situation depends on your salary, your employer’s policy and the car you choose.
How a novated lease works
- Check your employer offers it. Your employer has to agree to salary packaging.
- Choose your car — new or used, petrol, hybrid or electric.
- Get a quote showing the lease payment, the running-cost budget and the residual value.
- Sign the three-way agreement between you, your employer and the leasing provider.
- Drive. Payments come out of your pay; fuel or charging, servicing, tyres, rego and insurance can be paid from the budget.
- At the end of the term you can pay the residual and keep the car, refinance the residual, or trade up to a new lease.
Novated lease vs car loan
| Novated lease | Car loan | |
|---|---|---|
| Who can use it | Employees whose employer offers salary packaging | Most borrowers, including the self-employed |
| How it’s paid | From your salary, partly pre-tax | From your after-tax income |
| Running costs | Can be bundled into one payment | Paid separately |
| End of term | Residual (balloon) payment set within ATO guidelines | Owned outright, unless you chose a balloon |
| Best for | Higher kilometres, EVs, wanting costs bundled | Self-employed, or no employer packaging |
Self-employed or don’t have salary packaging? Compare car finance options or an ABN car loan instead.
What if I change jobs?
The lease is in your name, so the car stays with you. If your new employer offers salary packaging the lease can usually be transferred; otherwise you continue the payments yourself from after-tax income until you arrange otherwise.
How Car Buyers Assist helps
We make the enquiry simple. Tell us a few details about you, your employer and the car you’re considering, and we’ll refer your enquiry to Smart Leasing to prepare a tailored quote. There’s no obligation, and we’ll keep it straightforward.
Request a novated lease quote →
What we’ll ask for your quote
To prepare your quote our partner will typically need: your name, phone and email; your state; your employer name (and ABN if known) and whether they offer salary packaging; your gross annual salary band; the vehicle type and whether it’s new, used or electric; the estimated vehicle price; your preferred lease term and estimated annual kilometres; the running costs you’d like included (fuel/charging, tyres, servicing, registration, insurance, roadside); any trade-in; and your timeframe to purchase. You can include these in your enquiry and we’ll pass them to Smart Leasing with your consent.
Frequently asked questions
Does Car Buyers Assist provide the novated lease?
No. We help you explore the option and refer your enquiry to our novated leasing partner, Smart Leasing, who prepares the quote and arranges the lease. This is general information only.
Do I need my employer to offer salary packaging?
Yes. A novated lease requires your employer to participate in salary packaging. If you’re unsure, we can help you find out as part of your enquiry.
Can I novate a used or electric car?
Often yes — used cars and EVs can both be novated, subject to the provider’s criteria. Eligible EVs may also qualify for an FBT exemption.
How do I get a quote?
Send us an enquiry with a few details and we’ll refer you to Smart Leasing for a tailored, no-obligation quote.
Related
General information only. Car Buyers Assist facilitates novated lease enquiries and refers them to our partner, Smart Leasing. Novated leasing is subject to partner assessment, employer participation, eligibility and the rules applying at the time. This is not financial, tax or credit advice — consider your own circumstances and seek professional advice where needed.
For a side-by-side look at the two options, see our guide to the differences between novated leases and car loans.