Novated Leasing FAQs

## What happens at the end of my lease? ## Do I have to use Maxxia insurance for now? ## How does a novated lease work?

You have the option to lease a new car, re-lease your existing car or purchase your car outright to either keep or sell.

Find out more about your end of lease options

Not at all. If you're happy with your insurer and you know it, we simply budget for the annual premium and put that money aside so you can make the most of your pre-tax benefits.

Find out more about insurances

We help you set a budget for your car’s running costs, then deduct the costs from your pre and post-tax salary automatically through your payroll.

Find out more about how a novated lease works

  • What happens at the end of the lease?

    A novated lease agreement generally lasts between one and five years. We will contact you before your novated lease expires to talk you through your options.

    Depending on your employer policy and your own situation, you may be able to:

    • take out a new lease: you could upgrade to the latest model by trading in your current vehicle and paying any amount owing
    • refinance the car
    • keep the car: you pay the remaining amount owing on the car
    • sell the car: you will need to pay off the remaining amount owing.
  • Are the laws changing for novated leasing?

    You'll be delighted to know - especially if you're considering a new car – there have been no changes to the novated leasing legislation.

    The Coalition government cancelled the proposed changes to novated leases in September 2013. This means the same great benefits and potential tax savings still apply.

    In addition, previous changes made by the Federal Government in 2011 means it no longer matters how far – or how little – you drive, you could still benefit from a novated lease.

  • Can I lease a used car - even if it's my current car?

    Yes. With a novated lease you're not limited to any particular car type, model or make, unless stipulated by your employer. In most cases, you are free to choose the car you wish to lease, be it new, used or even your existing car.

    Some conditions may apply and the age of the car you wish to lease needs to be considered.

  • Will Maxxia take over an existing car lease or finance?

    If your current car is financed through a personal loan or dealer finance, or it’s under an existing novated lease, Maxxia may be able to transfer that into a novated lease. This depends on your personal situation as well as your employer’s policy.

  • What if I spend more or less on running costs than I estimated?

    If you are spending LESS than you budgeted for …

    You might find that the original estimates for running costs based on the type of car you have and the kilometres you travel were higher than you are actually spending. This means you could have a surplus of funds in your novated leasing account. You can request for these excess funds to be returned to you at anytime, through your employer’s payroll, meaning you will get them as part of your salary. We can also adjust your budget as required, just let us know if you feel your running costs have changed.

    At the end of your lease term we will reconcile your account within 60 days. If there is money in your account, we will send the funds to your employer. Your employer will then deduct income tax and pass the remaining balance back to you.

    If you are spending MORE than you have budgeted for …

    We will contact you to discuss increasing your regular payments to ensure you can cover the higher amount. This could be because you have driven more kilometres than you thought you would or that running costs such as petrol might have increased significantly.

    You can login to Maxxia Online to check your running costs and budgets whenever you like.

  • What if I change jobs, or lose my job?

    If this occurs, you may have a number of options available to you such as:

    • paying or financing the amount owing and buying the vehicle outright
    • continue paying the lease and running costs yourself, using only post-tax salary
    • transferring the lease to your new employer (subject to your new employer's approval).
  • What does “FBT” and “ECM” mean? FBT (Fringe Benefits Tax)

    Fringe Benefits Tax (FBT) is a tax which is applied to benefits you receive from your employer that are not in the form of cash salary or wages.

    For example, a novated lease is a benefit outside your cash salary or wages - so it is subject to FBT. To help offset any FBT you may be liable to pay on your novated lease, your deductions are set up to include a portion of your post-tax salary. This is known as the Employee Contribution Method (see ECM below).

    ECM (Employee Contribution Method)

    The Employee Contribution Method uses post-tax deductions from your salary to help offset the FBT payable on your novated lease. Post-tax means we take this portion from your salary after income tax has been deducted. You will see an amount of ECM noted in your quote or from the online calculator result.

    We use the ECM method to make managing your novated lease simpler for you. By paying using the ECM (or post-tax deduction), you reduce the taxable value of the car, which in turn reduces the FBT payable to nil and minimises the risk of having an FBT liability at the end of a FBT year (31 March).

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