A novated lease is one of the smartest and most tax-effective ways to finance a car in Australia. It allows you to use your pre-tax salary to pay for your vehicle and its running costs, helping you save more each pay cycle. Through Fingo, you can choose your car, structure your lease to suit your lifestyle, and enjoy flexible salary packaging that simplifies car ownership.
How does a novated lease work?
A novated lease is a simple three-way agreement between you, your employer, and a finance provider. You choose the car you want, and your employer makes the payments directly from your pre-tax salary. This lowers your taxable income and increases your take-home pay. Your lease can include costs like fuel, insurance, servicing, maintenance, and registration, all bundled into one easy pre-tax payment. To estimate your potential savings, try the Fingo novated lease calculator and see how affordable your next car could be.
Common myths about novated leasing
There are a few misunderstandings about novated leasing. Here are the facts.
Myth 1: You must use the car for work. Not true. You can use your novated lease car for personal driving or commuting.
Myth 2: It only applies to new cars. You can lease new or used vehicles, including hybrids and EV novated lease options.
Myth 3: It’s difficult to manage. With Fingo, everything from setup to running costs is managed for you, making the process seamless.
Myth 4: It doesn’t save you much. When you factor in tax savings, GST benefits, and included running costs, a novated lease often costs less than a traditional car loan.
Who is eligible for a novated lease?
Most full-time and part-time Australian employees can qualify for a novated lease if their employer allows salary packaging. You’re likely eligible if you receive a regular PAYG salary, work for an organisation that supports novated leasing, and hold a valid Australian driver’s licence. If your employer hasn’t introduced novated leasing yet, Fingo can help them set it up quickly and easily. Learn more about novated lease eligibility.
EV novated lease and FBT savings
Choosing an EV novated lease could deliver even greater tax savings. Under current Australian legislation, eligible electric vehicles are FBT-exempt, meaning no novated lease FBT applies. That means you can drive a premium EV while reducing your tax bill and running costs. If you’re considering an electric vehicle, Fingo can help tailor a package that maximises your savings and includes charging costs, registration, and insurance.
Pros and cons of a novated lease
Advantages
- Pay for your car and running costs before tax
- Save on GST and FBT where applicable
- Choose any make or model, including EVs
- Bundle all vehicle expenses into one simple payment
- Upgrade or own your car at the end of your lease
Considerations - You need employer participation in the agreement
- You don’t own the car until you pay the residual amount
- Changing jobs may require lease transfer (which Fingo assists with)
Novated lease vs car loan vs car allowance
When comparing car finance options, a novated lease usually offers better tax benefits and cost control.
| Feature | Novated Lease | Car Loan | Car Allowance |
| Payments from pre-tax salary | Yes | No | No |
| Includes running costs | Yes | No | No |
| Tax benefits | High | None | Limited |
| Flexible terms | Yes | Yes | Yes |
| Suitable for employees | Yes | Yes | Yes |
| For personalised results, use the novated lease calculator to compare your savings instantly. |
Why choose Fingo for your novated lease?
Fingo helps Australians drive better cars for less with expert guidance, transparent pricing, and fast approval. Whether you’re exploring your first lease or upgrading to an electric vehicle, our team ensures you get the maximum financial benefit with minimal stress.
Get My Novated Lease Quote
Frequently asked questions
- What does novated mean in a lease? It refers to transferring financial responsibility for the vehicle from you to your employer through a formal Deed of Novation.
2. How long does a novated lease last? Typically between two and five years, depending on your budget and needs.
3. What happens at the end of the lease? You can upgrade to a new car, extend your lease, or pay the residual to own your vehicle outright.
4. Can I lease an electric car under a novated lease? Yes, and many EVs qualify for FBT exemptions, making them even more cost-effective.
5. How does a novated lease affect my pay? Because your payments are made pre-tax, your taxable income is lower, which increases your take-home pay.
