Are you changing jobs and aren’t sure what will happen to your novated lease from here?
Good news! If you’ve entered into a novated leasing arrangement with your current employer, you will be able to continue benefiting from the agreement even if you leave the company. Here, we explain how the process works.
What is a Novated Lease?
Novated leases are a popular and cost-effective option for employees who are looking to buy or lease a vehicle without having to pay GST. A novated lease is a form of salary sacrifice that involves setting aside a portion of an employee’s pre-tax wage for payments towards the cost of a new vehicle.
What happens when I change jobs?
If you entered a novated lease agreement with your current employer and have decided to move on to greener pastures, what happens to the lease?
Will you have to give back that beautiful new car that you have faithfully polished every weekend for the past couple of years?
In a word, no.
Novation agreements are fully transferable. This means that if an employee leaves their current job or has their position terminated, they will still be able to make payments towards a novated lease, with the lease obligations being transferred directly to the employee rather than their employer. In some cases, a new employer may take on the lease obligations.
If you’re transferring jobs, these are your options:
1. Transfer the lease to your new employer.
If you’re starting a new job, you can simply transfer the lease to your new employer and continue to enjoy the savings by paying for it out of your pre-tax income. Don’t forget to ask your new employer if they support vehicle salary packaging.
2. You take charge of making the monthly payments.
If you’re not starting a new job straight away, or your new employer doesn’t offer novated leasing, or you choose not to continue, the lease will be transferred from your old employer to you, and you take charge of making the monthly payments, like a traditional car loan.
3. Pay out the loan.
You may want to pay out the lease and own the car outright. To do that you’ll need to pay out the remaining lease payments plus the residual amount.
4. We’re here to help.
If you’re planning on changing jobs or concerned about losing your job, get in touch with us and we’ll walk you through what needs to be done to take your novated lease with you and explain any other choices that might be available, including hardship options.
Stress-free novated leasing. All part of the service with Fleet Network.
