A novated lease is an arrangement between you, your employer and a leasing company where your employer uses your gross salary (before tax is deducted) to pay the leasing company for a car you use privately. The basic process at HealthShare NSW is:
- you lease a vehicle through a leasing company
- HealthShare NSW agrees to pay the lease on your behalf (Deed of Novation)
- the lease is transferred to HealthShare NSW
- HealthShare NSW pays the lease using your gross salary (before tax is deducted).
A vehicle you already have can usually be transferred to a novated lease, subject to approval by the leasing company. Normally these vehicles should be no more than eight years old at the end of the lease.
Trade-ins are not accepted and previous lease shortfall should not be rolled into a new lease.
There are many potential benefits of novated leasing, these include:
- fleet pricing
- tax advantages
- claiming a GST input tax credit
- running costs such as services, fuel and registration can be included
- the choice of a new or used vehicle.
While there are many potential benefits of novated leasing, individuals will need to determine if a lease is right for them. The following will affect a novated lease:
- overall income
- income tax bracket
- cost of the vehicle
- distance travelled annually
- personal financial goals
Types of leases
There are two main types of novated lease:
- Fully maintained - includes the lease amount for the car as well as ongoing costs such as services, fuel, registration, tyres, breakdown assistance and insurance.
- Non-maintained – is only the lease amount for the car and does not include other expenses.
Choosing a vehicle
The following conditions apply when choosing a vehicle to lease:
- used vehicles may be subject to an independent valuation
- vehicles should be no more than four years old at the commencement of the lease
- motorcycles cannot be leased.
Ending a novated lease
At the end of the lease term the employee has the following options:
- purchase the vehicle from the leasing company
- return the vehicle to the leasing company
- sell the vehicle yourself and pay the residual amount to the leasing company
- re-lease the vehicle.
If you terminate the lease early, any fees, charges or costs associated with the termination are your responsibility.
If you stop working with NSW Health the following conditions will apply to your novated lease:
- the Deed of Novation terminates immediately
- the Health Service no longer has an obligation to pay the lease
- you must notify your lease company and the Salary Packaging Team immediately.
If you stop working with NSW Health you have the following options for your novated lease:
- take over the payments to the leasing company
- re-finance with another form of borrowing
- transfer the novated lease to a new employer.
Approved leasing companies
Employees of NSW Health can arrange a novated lease with:
- Review information about leasing a vehicle and speak to your financial advisor to decide if it’s right for you.
- Research the approved leasing companies to understand their lease offerings and request a quote.
- Contact the Employee Benefits Team
For further information and assistance contact the Employee Benefits Team on:
- Phone: 8848 5111
- Email: email@example.com