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Can I have a Novated Lease on a used car?

Can I have a Novated Lease on a used car?

Yes, you can have a Novated Car Lease on a used vehicle. In fact you can have a Novated car Lease on a new, demo, used or even a vehicle you currently own. However, it is worth knowing which vehicle you can not package before falling in love with a car that you cant lease.

Age of Vehicle

The general rule when it comes to the age of the vehicle is that a leased vehicle can’t be more than 10 years old at the end of the lease. For example, if you are looking a leasing a 5-year-old car you can lease this for the maximum lease period of 5 years. However, if you are looking to purchase a 6-year-old car then you can only do a maximum 4-year lease, and so on. There are exceptions to this rule in the case of vintage vehicles and other vehicles that have reached a point in life where they are holding their value. If you are unsure if your dream car fits these criteria please call us on 1300 990 880.

You are free to source a vehicle either from a dealership or privately. However, if you are looking at buying a vehicle privately we will bee to do a physical inspection on the vehicle to ensure it has not been written off and fixed or under finance with another lender. This inspection will safeguard you from future problems.

Luxury Vehicles

To be able to explain this we will need to split your employer type between Government and private employers. Doing a Novated car lease on a luxury vehicle for a private employer can create more administration and report through the creation of company tax implications. Essentially the lease on any vehicle over the luxury limit becomes a company loan and the employer can only claim deductions on the portion of the interest and depreciation under the luxury car limit. For more information tax advice on this topic please contact your accountant. The good news for Government employees is that the government do not pay company tax and therefore the Novated lease on a luxury vehicle is treated in the same manner as any other vehicle.

1 Tonne Carrying Capacity Utes and Vehicles that carry more than 11 people.

Essentially doing a novated car lease on either of these vehicles is not allowed as they are not classed as “vehicles” under the Tax Act. Both types of vehicles are treated differently and it is best to seek independent tax advise.

If you haven’t found your new, demo or used vehicle we can help for new cars try our online new car buying site www.motorbuys.com.au. Motorbuys is designed so that you can choose the exact car in a few simple clicks. Motorbuys is the only site that allows you to choose the exact colour and accessories so that dealers can provide an accurate quote, so you can make a more informed decision. On a used car just let us know what you’re looking for and we can put you in touch with reputable vehicle dealerships in your area.

Before proceeding with any vehicle get a quick 2-minute pre-approval.