The employer leases a vehicle in the employee’s name, then deducts the expense from the pre-tax salary of the employee through salary sacrifice. At the end of the lease term the employee has the option to purchase the vehicle at the residual amount, refinance the lease or take out a new lease.

Yes, it is possible to structure a novated lease so that the running expenses of the vehicle are included in the lease payments.

There are a few options depending on the employee’s new circumstances. They are able to convert the lease to their personal name, or in some cases return the vehicle before the end of the lease term.

Your business or your employee have full control over which vehicle they wish to finance under a novated lease agreement. This includes second-hand vehicles from licensed dealers.