A novated lease has become an increasingly popular form of equipment financing over recent years. A novated lease will suit any employee who wants to include a vehicle as part of their salary package, so long as their employer offers salary packaging as an option for employees.
How does an Equipment Novated Lease work?
- A novated lease is an agreement between your employer, yourself (the employee) and the financier, where the obligation to meet the repayments under the finance lease is with the employer.
- Under this arrangement, the employer pays the repayments on behalf of the employee,, and provides the vehicle for the employee to use as part of their salary packaging arrangement.
- If an employment ceases for any reason, or the lease agreement is finalised, the novation ceases and the obligations assumed by the employer revert back to the employee.