Novated Lease

Novated Lease FAQ

A Lease is an agreement whereby the financier buys a car (of your choice) and agrees to let you use it for a pre-determined period of time (Lease Term). You pay the financier a rental amount each month in order to use the car.

Under ATO regulations, you can’t own the car outright at the end of the Lease. A residual value is set and payable at the end of the Lease term.

The ATO regulations state that the residual value needs to be a percentage of the original car value based on the term of the Lease. The current residual value percentages are:

Lease Term


12 Months


24 Months


36 Months


48 Months


60 Months


Based on the above, if you lease a car worth $25,000 over a 48 Month period, you would need to bid $8,750 at the end of the lease for the car.

Because the financier buys the car for you, they can claim the GST on the car purchase, therefore your Lease rentals are calculated on the GST exclusive price of the car. Because you buy the car at the end of the Lease, the Residual Value will be plus GST.