Comparing The Best Novated Lease Companies

How much is the car you wish to novate?

Written byBevan GuestReviewed bySean Callery

Finding the best novated lease company: 10 questions to ask

There are several key factors to check off when deciding which novated leasing company is going to be best for you. After all, the cost of your novated lease could vary significantly depending on which provider you choose.

Here are some of the factors to consider when comparing novated lease providers:

Do they have an extensive lender panel?
How easily can the novated lease consultant explain the quote to you?
Do you have flexibility to choose your own insurer?
Are there extras included in your quote that you don’t need?
How will I be supported throughout my lease?
Will your personal information be kept secure?
Will your lease be tax-compliant?
How well will your employer be supported?
What fleet discounts are they able to achieve on new cars?
What type of fuel card do they offer?

Below we explain each of these points in more detail.

1. Do they have an extensive lender panel?

Just like when you are arranging finance for anything else, it's wise to get multiple quotes. When you work with a novated lease company, you want to make sure that they are reviewing options on your behalf from multiple lenders in order to find you the best novated lease deal with the lowest interest rate possible.

If your employer's default novated lease provider offers a limited choice of lenders, you could consider a self-managed lease to broaden your options.

2. How easily can the novated lease consultant explain the quote to you?

Even though novated leasing has been around in Australia for decades, you may be acquiring one for the first time.

It's important for you to be able to fully understand what it actually means, what’s in your quote, how it affects your salary and how things like the residual value and fringe benefits tax works if applicable. A good novated lease consultant should be able to talk you through all of this simply and will be happy to answer all your questions.

The same goes for setting the right running cost budget for your lease. Your consultant should be able to ask the right questions to ensure your quoted budget is adequate from the start, rather than offering a low estimate which may need to be increased down the track based on your actual car usage.

You should also get a full explanation of what happens at the end of your novated lease.

3. Do you have flexibility to choose your own insurer?

Being able to package your car running costs, like insurance, is a big benefit of a novated lease. But you’ll get the most out of the arrangement if you have the flexibility to compare options and choose the insurance provider that you’re happy with. Then, in an ideal world, you should simply be able to reclaim the cost of your insurance using your novated lease budget so you can still enjoy a tax saving.

However, in some cases you may not have this option or you might have to pay an extra admin fee for using your own provider and reclaiming the cost.

4. Are there extras included in your quote that you don’t need?

Watch out for unnecessary extra costs that are included in your novated lease quote by the provider by default. If there are extra costs included, like additional insurance products, ask the provider what these are for, why they are included and carefully consider whether they are necessary based on your situation and if they provide value for money.

Our novated lease calculator will give you an idea of your costs if you want an initial estimate.

5. How will I be supported throughout my lease?

Ask the provider how you will be supported once your lease is established. How easy will it be to do things like check the balance of your car running budget, reclaim expenses and get support if you need it? It may pay to check out providers’ online reviews to ensure you are confident of the service they will provide.

Novated Lease Australia’s commitment is to support customers through the life of their lease. Our customer service team answers 98% of calls in under 30 seconds and responds to email queries in less than two hours. We’re investing heavily in our digital platforms to give customers a wide range of options for receiving support. Clients of ours can also get in contact with their original consultant at any time if they need follow-up support.

6. Will your personal information be kept secure?

A novated lease, like any finance arrangement, means providing personal and financial information about yourself. This is necessary so that your lease can be tailored to your needs. It’s also a requirement of the credit application process.

Make sure any novated lease provider you’re considering has a clear privacy policy, outlining how your personal information is handled, with strong safeguards for managing your data securely.

7. Will your lease be tax-compliant?

Be wary of novated lease companies recommending shortcuts or other tactics that may fall foul of the Australian Taxation Office (ATO). For example, your lease’s residual value should align with the ATO’s guidelines (unless there is a clear justification) and the correct method should be used to calculate any fringe benefits tax liability on your lease.

8. How well will your employer be supported?

It’s also important to work with a novated lease company that’s capable of supporting your employer in setting up the lease. Particularly if your employer is offering novated leasing for the first time, the right lease company will be able to guide them through the process and set up each employee’s lease in a cost-effective way for everyone involved. For example, your novated lease should be set up to ensure there is no fringe benefits tax liability for your employer.

9. What fleet discounts are they able to achieve on new cars?

It’s sometimes possible for novated lease companies to access discounts on new cars that the average consumer generally won’t have access to. This is because novated lease providers facilitate the purchase of cars in bulk.

Be sure to check with any provider you’re considering what discounts they can access and whether the saving will be passed on to you.

10. What type of fuel card do they offer?

This might seem a little trivial when you're arranging your novated lease for a brand new car, but it can be frustrating down the track if you are locked into using only one or two service station providers using the fuel card provided to you.

Ultimately, you want maximum flexibility to use as many petrol stations as possible throughout the country.

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