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Novated Lease

A novated lease is a three way agreement between the employer, employee and the lender.

The employer, employee and financier sign a Novation Agreement, whereby the employer agrees to take on the employee’s obligations under the lease. Under this arrangement, the employer makes the monthly lease payments on behalf of the employee. Should the employee leave his or her employment for any reason, the Novation Agreement ceases and the obligations assumed by the employer revert to the employee as the registration is in the employee’s name.


The choice of vehicle remains with the employee, ensuring it is a vehicle that fully meets their needs.

The employer deducts a portion of the vehicle financing and running costs from the employee’s pre-tax income, which can reduce the employee’s taxable income, and thus the amount of tax payable. And there is no need for the employee to do anything on their tax returns, the employer and lender take care of this.

If a vehicle is purchased using another form of finance, 100% of the costs will be taken from after tax income, providing no tax benefit at all.

If a fully maintained lease is opted for, vehicle running costs, such as maintenance, registration, insurance costs and projected fuel can also be included in the regular salary deduction.

Mildura Finance are also able to assist with finding the right vehicle, as well as offering fleet discounts on the purchase price and running costs.

Would you like more information?

You can give us a call on (03) 5051 0400 or fill out the form and we’ll have an expert consultant get back to you