Novated Lease at Clintons Toyota

A cost effective employee benefit

What is a Novated Lease?

A novated lease is a three way agreement. The employee, as lessee and the employer enter into a novated lease agreement with Toyota Fleet Management as the lessor.

All of the lessee's obligations to pay vehicle lease rentals are transferred ("novated") to the employer. The employer then makes such payments to Toyota Fleet Management on behalf of the employee for the term of the novation - or until employment ceases, should it occur during the lease term.

Employees can choose their own vehicle, and have their employer pay the vehicle lease rental from their gross salary, potentially giving them a higher disposable income.

Toyota Fleet Management can also administer post tax employee contributions to minimise fringe benefit tax liability.

Employee benefits:

• Greater flexibility with the choice of a vehicle.
• Financing for the vehicle is paid with pre-tax dollars.
• Employee can make an offer to purchase the vehicle at the end of the novated lease term.
• Fixed payments for the term of the lease.
• A choice of lease terms from 1 - 5 years.
• The vehicle may be leased for 100% private use.
• More than one vehicle may be leased with employer's consent.

Employer benefits:

• Removes liability and asset from balance sheet.
• Reduces administration - one invoice for all Novated vehicles.
• An easy and cost-effective way to add value to an employee's remuneration package.
• The vehicle stays with the employee, even if they move to a new job.
• Employer does not have to worry about vehicle sale or disposal at the end of term.
• Reduces payroll tax and Work Cover expenses (subject to State laws).