How about getting a car through work? You’re not alone. Many Aussies are turning to employee car benefits for better vehicles, tax savings, and easier budgeting. However, before you begin, ensure that you ask the right questions. These benefits can be a smart move—but only if they match your income, job stability, and lifestyle. In this guide, we’ll cover the key factors to consider so you can make a confident and well-informed decision.
What Is Novated Leasing and How Does It Work?
If you’ve looked into employee car options, you’ve probably come across novated leasing in Australia. It’s a three-way agreement between you, your employer, and a leasing provider that lets you lease a car using your pre-tax salary.
This setup means your repayments, fuel, servicing, and even insurance are bundled into one monthly payment that comes out before tax. It’s a simple, tax-friendly way to drive a car without taking out a personal loan or dipping into savings. However, like any financial product, you need to understand how it works before investing.
Does My Employer Offer This Benefit?
Not every employer offers novated leasing or similar vehicle benefits. Some workplaces offer comprehensive salary packaging programs, while others may not provide any at all.
The first step is to check with your HR department or employee benefits coordinator. Ask if your company supports novated leasing and if they have preferred providers. If they do, you’ll typically have access to better deals and a smoother onboarding process.
Will This Help Me Save Money, or Cost Me More?
A novated lease might sound appealing, but it’s important to crunch the numbers. Sometimes, people sign up thinking they’re saving, only to find out they’re paying more due to high fees or hidden costs.
Request a detailed breakdown of all expenses, including lease payments, insurance, maintenance, and any administrative charges. Compare that with what you’d pay if you financed or bought the car yourself. If the lease saves you tax and gives you peace of mind, it could be a win-win—but you’ll only know by doing the maths.
What Happens If You Change Jobs or Get Made Redundant?
Here’s a question many people forget to ask: What happens to the lease if you leave your job? Since the agreement is tied to your employer, there may be complications if you resign, switch companies, or get laid off.
In most cases, you’ll need to take over the lease privately or transfer it to a new employer (if they allow it). Some providers offer flexible exit options or short-term leases to reduce this risk. Ensure you understand your obligations before committing.
Can You Choose Any Car You Like?
Many novated leasing companies allow you to pick any car—new, used, fuel-efficient, or even electric. But there may still be limits depending on your employer’s policies or the lease provider’s restrictions.
Ask whether you can choose the make, model, and year you want. Also, check if there are any limits on the vehicle’s age or if luxury cars are excluded. This way, you’re not stuck with options that don’t fit your lifestyle or preferences.
What Do You Get in the Monthly Payment?
Not all novated lease deals are equal. Some include everything—fuel, rego, tyres, servicing, insurance—while others only cover the lease and leave you to manage the rest.
Get a full list of what’s included in your package. A comprehensive lease can help you budget more effectively and avoid unexpected bill surprises. However, if numerous extras are excluded, you may need to factor in additional costs that impact your overall savings.
Is Novated Leasing the Best Option for Me in Australia?
Novated leasing in Australia has gained popularity in recent years due to its convenience and tax benefits. But it’s not your only choice. Depending on your needs, a car loan, a business use tax deduction, or outright purchase might be the better option.
Think about how often you drive, how long you’ll stay in your job, and whether you like changing cars every few years. Leasing isn’t for everyone, but when it fits, it can be a smart, stress-free solution for owning a car through work.
Choosing the right employee car benefit starts with asking the right questions. From checking if your employer offers novated leasing to understanding the fine print, a little research goes a long way. These car benefits can genuinely save you money and simplify your life—but only if they match your income, job stability, and personal needs. Take your time, get clear answers, and be sure before you sign on the dotted line. Your future self—and your wallet—will thank you.
Guest writer
