What is it?
A Novated Lease is a three-way agreement between you (the driver), your employer, and a finance company (ORIX), where you can finance and run a vehicle using your pre-tax salary.
How does it work?
You, your employer and ORIX will enter into a full Novation Agreement where your employer holds the lease, assumes all lease obligations and makes the payments to ORIX from your pre-tax salary.
You choose the car you want based on your credit options. Then you (the driver), your employer and ORIX enter into a Full Novation Agreement under which you transfer the lease of the vehicle to your employer, who then assumes all lease obligations and pays the lease rentals to ORIX (and maintenance and operating costs if included) from your pre-tax salary.
If you leave the company before the lease expires, the Novation Agreement lapses. Your employer’s responsibility to make lease rental payments ceases and this responsibility becomes yours. You are then liable for the lease rental payments including GST and maintenance or operating costs, if they have been included.
Novated Leasing allows you to drive off in a brand new vehicle with tax advantages and fleet savings.