Non-maintained novated lease calculator

Novated lease calculator

The calculator below will let you calculate and give you an indication of repayments and how much the lease may cost you.

You'll need to enter the purchase price of the vehicle as well as the interest rate, any residuals and the loan term.

What is a non-maintained novated lease?

Novated leasing is where an employee leases a car through salary sacrificing. A car lease is taken out with a third party leasing company by the employer on behalf of the employee.

A non-maintainted novated lease is one where the salary sacrifice only covers the cost of the lease payments and not any of the maintenance costs.

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How does a non-maintained novated lease work?

The payments for the lease are facilitated by the employer and come through the employee's pre-tax salary.

With a non-maintained novated lease, the salary sacrifice covers the cost of the lease only. The employee needs to make sure their post-tax income can cover the costs of maintaining the vehicle.

The novated lease can be used to acquire both used and new cars with a value of more than $10,000.

This type of lease can be beneficial to both the employees and employer. The employer gets to enjoy reduced administration costs, which can be high with company owned cars. Should the employee leave that place of work, the novated lease and all financial obligations cease to be assumed by the employer and are reverted to the employee. The employee therefore can retain equity accumulated by the vehicle.

What's the difference between a maintained and non-maintained novated lease?

As explained above, the costs for the lease only come out from the employee's pre-tax salary. Costs for maintenance must be paid by the employee separately.

With a fully maintained novated lease, the costs of maintenance come out of the pre-tax salary as well. These costs can include servicing, maintenance and insurance.

Related reading: Learn about fully maintained novated leases

How to compare non-maintained novated leases

It might be that your employer already has a supplier it uses for novated leases, but if not and you're in a position to help find a good one, here are some things to bear in mind:

Fees.

Different financiers will have different fees for borrowers. Before you take on a lease, find out what the applicable fees are and how they compare to other financiers in the market.

Running costs.

The running costs are What are the running costs you will have to bear and how do they compare to that of a maintained novated lease? For the employer, the costs are less since the employee will have to maintain the costs.

Interest rates.

Can you get better interest rates on your lease? That is always a possibility. Compare the different interest rates offered by different providers before you take on any lease.

Features.

There are different features that are offered with novated leases. You can get fleet discounts, regular payment structures and much more even with a non-maintained lease. Compare features to get the most suitable for you.

Pros and cons of non-maintained novated leases

How to apply for a non-maintained novated lease

The first thing to do is check that the option for a novated lease is available through your employer. If they have set this up before with another employee, they may be able to handle most of the process for you.

You may also need to provide:

• Vehicle details. This includes vehicle make and model, build year, where you want to buy it i.e. dealer, auction, private seller.
• Financial details. This includes the lease length you prefer, the vehicle price, and the running.
• Contact information. This includes your name, address and phone number, name of your current employer and details of your gross salary.

Things to be cautious of

• Going overboard on distance.
  Distances or kilometres is often limited and it’s important that you maintain the mileage that is indicated on your contract. If you drive more than your indicated mileage, you may be fined for excess mileage per extra mile. However, you don’t have to underuse the car since you will not get credit for any miles that are unused.
• Customising the car.
  It is generally a good idea not customise a leased vehicle as you may be charged extra.
• Poor maintenance.
  Just because the car is leased doesn’t mean that you can get away with poor maintenance. The car must be in good condition and you may be charged excess for wear and tear.
• Not comparing.
  When choosing and comparing vehicle options for your business, it is always a good idea to compare a range of finance options and lenders. The table below can help with your due diligence.

Frequently asked questions about non-maintained novated leases

• What happens if I leave my employer?

  If you leave your employer during your novated lease, the responsibility of the lease remains on you. This means you will either need to back what's left on the lease or arrange to transfer the lease to a new employer (if they allow salary sacrificing in this way).

  You may be able to make an agreement with your existing employer to continue making repayments to them until the car is paid for, or you can take over the whole agreement yourself.

• What happens if I write off the car?

  With a non-maintained novated lease, you will have been in charge of the insurance. The very first thing to do is call your insurance provider. This may or may not provide enough cash to pay off the lease, but either way, the finance company will need to be paid the remaining amount.

Written by

Matt Corke

Head of Publishing Ventures

Matt Corke is Finder’s head of publishing ventures. Prior to this he was head of publishing for Australia, New Zealand and emerging markets. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time, he has survived the dot-com crash and countless Google algorithm updates. See full bio