Novated

Similar to a finance lease, a novated lease involves obtaining finance for a new or used vehicle in return for regular repayments over a fixed period of time.

The difference is that your employer agrees to make the payments out of your pre-tax salary.  Therefore a novated lease is a three way agreement – between you, the employee, the finance company and your employer. The employer must commit to making the repayments whilst you are employed by them, although if you cease employment, the vehicle ownership as well as the finance commitments remain with you.