The business benefits of novated leasing

3 mins read

a woman writing a book
a woman writing on a book

We all know that buying a car is a big financial investment, so providing the right car finance option to your employees can help make the process a whole lot easier.


If you or your employees are interested in purchasing a vehicle for personal or business use and are unsure of the best way to finance it, read on to find out more about novated leasing and how it could save your business money and benefit your workforce.





What is a novated lease?

A novated lease is one of the most cost-effective ways to finance a new or used vehicle. There are many benefits, including savings on GST and purchase price, servicing and more.

No matter the size of your business, you can offer salary packaging to your employees, where they finance a car via ‘salary sacrifice’. As an employer, you commit to paying for the lease and running costs through your employee’s annual pre and post-tax salary deductions.




Differences between a novated lease vs other types of finance

There are a number of different finance products that can help people finance their vehicles. Two of the most common ones people opt for are a novated car lease or a car loan. Novated leasing allows the cost of the vehicle and associated running costs to be spread over an agreed term. This can improve your cash flow and help in other ways too with GST and income tax savings.




Who can offer or access novated leases?

Directors, sole traders and self-employed small businesses

If you are employed by a business, even if you own that business, as long as you receive a wage and pay tax through the PAYG system, you may be eligible for a novated lease.

Small to large business owners

No matter the size of your business, you can offer salary packaging to your employees.

a woman working
a woman working



How does a novated lease benefit an employer?

As a business, having the option to offer perks to your employees such as novated leasing can help set you apart from competitors. Offering salary packages can help you attract and retain employees, allow your business to enjoy tax-deductible payments and reduce payroll tax.




How does a novated lease benefit an employee?

A novated lease lets employees choose the car they want, pay less tax, free up cash flow and save money in the process. One neat monthly payment can also help smooth their expenses and save on running costs. Plus, employees may also have the option to take the car with them if they change jobs, which means employers won’t be left to deal with the fallout if an employee leaves the business.




How does a novated lease work?

Set-up

After receiving a quote, you or your employee will select a vehicle and a ‘salary sacrifice’ novated lease is set up between employee, employer and Toyota Finance.

Vehicle

Once the vehicle has been delivered, it is the employee’s responsibility to register the vehicle and organise insurance through a provider of their choice. We can recommend car insurance products through Toyota Finance.

Support

Alongside customer support and fringe benefit tax services, employees can get help with ongoing management including repairs, maintenance and roadside assistance.

End of lease

At the end of the novated lease period, employees can choose from the following options: extend the lease, buy the car outright or return it. They can also get another novated lease for a new car.

Blue Toyota Yaris
Blue Toyota Yaris


Ready to take the next step?

Our dedicated Toyota for Business support team is here to answer your questions and can discuss whether a novated lease is the best way to get behind the wheel of a new Toyota.


contact us get an estimate
Frequently asked questions

Learn more about the benefits of Fleet with Toyota

Learn more

Book your free consultation with a Toyota Dealer

Get in touch


Disclaimer

This information provided is of a general nature and for information only. Nothing in this article constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any of the products and services featured on this article, you should consult with your own independent legal, taxation and financial advisors, who can advise you about your personal circumstances.

[C17]Subscription-based. For Toyota business customers only. Requires activated DCM (until the earlier of 2033 or Telstra 4G sunset), compatible device, app installation/connection on, third party info, mobile data, Australian network reception. GPS signal, enabled push notifications and other factors outside Toyota’s control which can limit functionality. Mobile and data usage at user’s cost. Features vary depending on vehicle model & subscription choice, and subject to change. For details and T&Cs see www.toyota.com.au/fleet/halo-telematics.

Our business mobility guide

Our business mobility guide helps you better understand vehicle ownership across every stage of your business.

Read more articles

{{ disclaimer.title }}