Your novated lease questions, answered

Learn more about Flare Cars and the novated leases we can offer you.

Novated lease FAQs

What is novated car leasing and how does it work?

Novated leasing is an ATO-approved benefit in which all the costs for running a car are taken directly out of your salary, through a combination of pre and post tax deductions by your employer. Flare Cars holds the budgeted money for your car related expenses, for example: finance, fuel, insurance, tyres and servicing you so you can pay for your car expenses as they arise from the budget so you are never out of pocket.

How do I save money with a novated lease?

By doing a novated lease; your taxable income is reduced so you pay less income tax, you don’t finance the GST on a new or used car from a dealership, all your running costs are paid for out of your pre-tax salary and you don’t pay GST on any of your running costs. You will save thousands of dollars over the life of a lease.

What term can I do a lease over?

You can lease a car for between 12 and 60 months - so it’s really flexible depending on your needs and budget.

Why does the lease have a final payment or residual due at the end of the lease?

The ATO mandates that a lease must have a final payment and they set the amount based on the vehicle cost and lease term. Having a final payment offset to the end of the lease actually reduces the monthly cost for your finance compared to a loan with no residual so it works in your favour. Plus the future value of the car can cover the residual amount due.

What type of car can I do a novated lease on?

You can lease a new, used or even your current car that you own right now.

How do I get an estimate on what a lease will cost me?

Fill in your details in the form below to get estimates on different vehicles or various drive away costs.

Can I do a novated lease on a used car?

Yes, a used car can be no older than 12 years old at the end of the lease term. So for example, if you want to lease a used car over 5 years, the car must be 7 years old or newer at the start of the lease. All you’ll need to do is provide a quote from a dealer on the used car. Don’t sign any contracts to buy until you have your credit approved.

I want to lease my current car. How do I take advantage of the tax benefits of leasing?

If you own your current car outright, or owe less on existing finance than the car is worth then we can explore a lease for you under what’s called a “Sale and Leaseback” arrangement. The finance company essentially buys your vehicle from you and leases it back to you over an agreed term.

How do I lease a new car?

Contact us to obtain estimates on various new cars you’d like to consider. Once you are ready, talk to one of our sales team and let us know what car you are looking for, what accessories you want and we will organise everything for you. Your new car can be delivered straight to your door and you won’t have had to leave the house.

Is novated leasing only beneficial if I drive high kilometres per year?

That is no longer the case. The Federal Government changed legislation a few years back which made the benefit of leasing universal regardless of kilometres driven. So, it doesn’t matter if you’re doing 5000kms per year or 25000kms, you will still save money. The only thing kilometres impact are your running cost budgets for fuel, servicing and so on.

Why do I have both pre and post tax deductions?

Not all your lease costs can come out pre-tax. The ATO mandates that a portion of the deduction from your payroll has to be post-tax. This eliminates any fringe benefits tax liability usually associated with an employer benefit. But you don’t need to worry about this, we’ll take care of it with your payroll department.

How do I pay for my running costs?

Flare will provide you with a Fuel and Maintenance Card at the start of your lease which you will use to pay for fuel, servicing, tyres and more. Costs for these will be deducted from your budgeted balance. For other claims where the card cannot be used (e.g. car washing) you will be able to submit claims and receipts for reimbursement via our Driver Management Portal.

What if my car's actual running costs are different to what Flare has budgeted?

Flare will try and make sure that your budgets are as accurate as possible however, if your expenditure exceeds what we are taking in budgets - we will contact you about increasing your deductions. Also, if we are taking too much and your actual running costs are less than what we have budgeted then we can look at reducing your budgets.

What if I don't have enough money in my balance to cover a claim?

We can look at a few options:

  • You can either hold off claiming until your balance is sufficient.
  • We can schedule a one off future payroll deduction to cover the whole claim.
  • We can schedule multiple future deductions to cover the claim.

Claims where there is not sufficient balance in your account will not be paid.

What can I claim as part of the lease?

Fuel, servicing and maintenance, tyres, repairs, rego renewal, insurance - comprehensive and CTP.

What can’t I claim as part of the lease?

You can't claim accessories being fitted to the car after you have taken delivery. You can include items on your new and used car but these need to be fitted prior to delivery and they need to be on the vehicle invoice. You cannot claim for upgrades and improvements to your vehicle. You can claim for replacement parts due to wear and tear.

What happens if I leave my current employer?

You have a couple of options here. If your new employer offers novated leasing, then you should be able to transfer your novated lease over via your new employers salary packaging provider.

Alternatively, if your new employer does not offer novated leasing, you can pay your finance directly to the financier however this becomes your responsibility and you would lose the associated tax benefits.

What are my options at the end of the lease?

The final lease payment needs to be paid at the end of the lease. Most people sell or trade in the car to cover the payment then take out a new lease on another car. You can also finance the residual amount or pay it out from savings and keep the car. Any money received through the sale of the car over and above the final payment due is yours to keep. If your vehicle's value is less than the residual value due then you need to make up the difference. You can put money in your expenses balance towards the final payment however, only once it has been returned to you via your employer payroll.

Can I exit the lease early during my term?

You are able to settle your finance and terminate your lease at any time. However, you should note that the financier may charge a termination fee, and you will need to cover all of the finance amount that remains to be paid. This means that terminations early on in your lease term, the value of your car may be less than the finance owed on the vehicle.

Do I own the vehicle?

The finance company owns the car, you lease it from them however you are the registered owner of the car with the relevant driving agency.

What happens if I have money left over at the end of the lease in my balance?

This can either be returned to you via your payroll, or we can retain any balance to be used towards your next lease.

Find out how much you can save

Fill out our contact form, and one of our staff will get in touch to help determine how much you could save on your car and all its running costs.

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