How to Apply for a Novated Lease
The novated lease application process is relatively uncomplex.
Are you considering a novated lease?
Novated leasing is an increasingly popular option for both individuals looking to finance a new car and employers looking to enhance benefits for their employees to attract and retain top talent.
This flexible arrangement allows employees to lease a vehicle using their pre-tax income, offering significant financial advantages.
If you're considering a novated lease, this guide will take you through everything you need to know about novated lease requirements and the application process, so you know what to expect before, during and at the end of the lease term.*
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Applying for the lease
So, exactly how does a novated lease work in Australia?
You might be surprised that the novated lease application process is relatively uncomplex. In fact, Metro makes the novated lease process simple with just five easy steps.
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Start the application process
Before diving into the novated lease process, it's essential to first research the car you want and explore other finance options available to you. Consider factors such as vehicle specifications, pricing, and reliability.
Of course, you’ll also need to check with your employer to ensure they participate in novated leasing programs. Seek their approval and confirm any eligibility criteria or restrictions that may apply.
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Get a quote
Once you've narrowed down your car options, the next step is to obtain a quote from a trusted Metro introducer. These professionals specialise in novated leasing and can guide you through the entire process, including discussing any novated lease requirements.
A Metro introducer will calculate the lease repayment amounts based on your chosen vehicle, lease term, and projected annual mileage. They will also provide details about tax savings, which can be substantial under a novated lease arrangement.
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Finance Assessment
Once you've received the quote and are satisfied with the terms, it's time to proceed with the finance application. The Metro introducer will guide you through the novated lease application process, ensuring you complete all necessary documentation accurately. They will liaise with Metro on your behalf, streamlining the application process and increasing your chances of approval.
Be prepared to provide financial information, such as proof of income and employment details, to facilitate a smooth approval process.
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Sign the agreement
Upon receiving finance approval, you'll need to sign the novated lease agreement. To provide greater convenience, Metro provides electronic documents so you’ll have the ability to sign electronically. This agreement outlines the terms and conditions of the lease, including repayment amounts, lease duration, and any additional fees or charges.
It's crucial to review the agreement thoroughly, seeking clarification on any aspects that are unclear before signing with your introducer. Once you're satisfied with the terms, sign the agreement and return it to the novated lease provider.
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Enjoy your new car!
After signing the agreement, you can start enjoying your new car!
Novated lease providers often provide welcome kits that include important information about your lease, such as contact details for support and maintenance services. Take the time to familiarise yourself with these resources, as they can be invaluable throughout the lease term.
During the lease
While payments for your novated lease will be handled through your salary, it's important to consider a few factors:
- Changes in Employment: If you experience a change in employment during your novated lease, such as switching employers or transitioning from full-time to part-time employment, it’s important to inform your novated lease provider. Changes in income or employment status can have implications for your lease agreement, including adjustments to your lease payments.
End of the lease
To qualify for a novated lease, you generally need to meet the following criteria:
- Continuing the Lease: If you’re still satisfied with your current vehicle, you may have the option to continue the lease for an extended period via a balloon refinance. This allows you to enjoy your car without the need for major changes or disruptions.
- Upgrading to a New Vehicle: If you desire a different vehicle at the end of your lease, you can explore the possibility of upgrading to a new vehicle through a new novated lease agreement. Options will be discussed with the packager and residuals will be clear.
