How does a Novated Lease work?

by mritunjays82 » Mon Jun 14, 2010 07:17 am

The employee selects the motor vehicle of their choice and, subject to credit approval, enters into a financial arrangement with a finance lender or bank.

The most common form of (link removed by mod-lori) arrangement is a finance lease where the employee enters into a commitment to make monthly car lease payments and fixed residual at the end of the car lease. The residual is an amount that is set by the Australian Taxation Office (ATO).

Under the novated lease agreement, the employer assumes all the employee's rights and obligations under the car lease, including the responsibility for making the car lease rentals while the employee remains employed by the employer. The finance lease remains in the name of the employee who remains the registered owner throughout the Novated Lease and keeps effective control of the motor vehicle at all times.

If the employee leaves the company, the Novated Lease agreement expires immediately and the motor vehicle remains with the employee. In this situation, the employee generally takes over the payments or gets another employer to novated the finance lease again.

Total Comments: 1

Posted: Wed Jun 23, 2010 11:36 am Post Subject:

mritunjays82, I've had to remove links from two of your three posts, you are welcome to post on this site, however there is ZERO tolerance for hawking of wares in threads..please read and adher to our terms of use..failure to do so will result in you being permanently banned from this site.

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