What is a novated lease arrangement?
A novated lease is a special kind of motor vehicle lease that allows employees to operate personal motor vehicles in a tax and cost effective manner when compared with more traditional forms of finance. ‘Novated’ refers to an agreement between the employer, the employee and the financier of the vehicle, whereby the employer agrees to meet the repayments of the finance lease while the employee remains employed. In return, the employee ‘Sacrifices’ a portion of their salary to cover the cost of the finance.
