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A novated lease is an all-in-one service that includes finance and running costs for your vehicle. Auto-UX calculates what these costs are over the life of your lease and divides the cost by the number of months in your agreement. This means you have one fixed cost per month, and Auto-UX manages the ups and downs of cashflow. Your employer pays for the monthly cost, and they deduct it from your salary, much of it PRE-TAX (or all of it if you purchase certain electric vehicles)! The effect of this 3-way agreement between Auto-UX, your Employer and You is that your taxable income is reduced, you pay less income tax, and have more disposable income than you would buying the car any other way!

Pretty much everything: Car sourcing, finance, fuel/charging, insurance and registration, servicing, tyres, roadside assistance and even vehicle disposal at the end of your lease.

The significant income tax savings available through a novated lease are made possible by salary packaging your car costs. Auto-UX bills your employer one budgeted amount every month, and your employer collects this from your salary. The trick is to structure your package in a way that maximises the amount that can be deducted from your pre-tax salary (hint: some electric vehicles can be packaged 100% pre-tax).

Yes! Leasing a used car is a great way to maximise the overall cost effectiveness of a novated lease. The only consideration is that the car cannot be older than 11 years old by the end of the lease.

Yes! As long as the car won’t be more than 11 years old by the end of the lease, you can set it up on a novated lease. By doing this, you’ll be paid market value for the car so that you can invest that money wherever you like. You’ll then be repaying the car through the lease and enjoying all the GST and tax savings on those payments and your running costs.

Yes! As long as you have the income to support a second (or third) lease and we can get you approved by the financier, you can absolutely have more than one lease at a time.

No! In fact, novated leasing is the only way you can get a tax benefit on a car with no business usage.

No! This used to be the case but was abolished in 2011. You can get tax benefits on a novated lease regardless of whether you drive 5,000 or 50,000 kms per year.

No! By using the Employee Contribution Method, FBT is completely eliminated.

The employee contribution method (ECM) is where a proportion of your salary deductions are deducted from your post-tax salary. This is done to offset any FBT liability. Most leases for petrol and diesel cars use a combination of pre and post-tax deductions to pay for the lease, delivering a significant tax saving to the employee. For some electric vehicles, or if you have 100% business use of your car, it is possible to pay for your lease entirely from pre-tax deductions.

At the end of the lease we reconcile your actual expenditure versus your budget. Any unspent funds are credited back to your employer to be paid back to you through your salary. If it becomes clear part way through your lease that the budget is significantly higher than what is required, we may perform a reconciliation earlier, or do a recalculation of your payroll deductions so that they are better suited to your usage. Either way, you’ll always only end up paying for exactly what you use by end of lease.

When your expenditure is higher than your budget, we will perform a reconciliation, and or a recalculation of your budget to ensure that we’ve got you covered. This may mean we need to do a one-off adjustment where there is an additional deduction from your pay, or it may be enough to make an adjustment to ongoing deductions so that a reconciliation is avoided. Either way, you’ll always only end up paying for exactly what you use by end of lease.

When you leave your employer, the Novation Agreement with the employer is cancelled and the lease leaves with you.

If you are going to a new employer, we can set up a new Novation Agreement with the employer (if they agree) so that you can continue to benefit from the savings (this is called a Re-Novation).

Alternatively, you can continue to enjoy your car while you pay the lease repayments directly to the financier (not through salary packaging). Just remember that you won’t get the tax benefits in this case and you’ll need to pay for all running costs out of your back pocket… just like if you had a personal loan.

The ATO stipulates that a vehicle financed through a novated lease cannot be paid down to zero (we guess the tax savings would be too high!). The ATO has set the value that a car can be paid down to (called a residual) depending on the length of the finance term (see below).

Other than getting a great deal on the car upfront and maximizing discounts and tax savings over the course of the lease, it’s also important to structure your lease so that the car’s resale value is more than the residual. This is part of the service Auto-UX provides, and the great news is that if the car is worth more than the residual at the end, you get to keep the profit 100% tax free!

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