Novated Leasing FAQs

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

You can choose 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. You have the option to keep your insurer – we simply budget for the annual premium, so you can make the most of your pre-tax benefits.

Find out more about insurances

This three-way agreement between you, your employer and a finance company allows you to use a combination of your pre and post-tax income for the running costs associated with your vehicle.

Find out more about how a novated lease works

  • What happens at the end of the lease?

    Before your lease expires, we will be in touch to discuss what direction you would like to take at the end of your lease, these include:

    •  Take out a new lease - upgrade to the latest model to continue enjoying the convenience and tax savings of a novated lease.
    • Refinance the car – extend the arrangement of your current car by refinancing the residual amount.
    • Keep the car – purchase your current car by paying the residual amount. 
  • Are the laws changing for novated leasing?

    There are no changes proposed to novated leasing legislation.  All changes proposed before the September 2013 Federal Election where cancelled by the incoming Government. This means all the great benefits and potential tax savings that come with a novated lease are fully available.  

    What’s even better is that changes made in 2011 also mean you no longer need to worry about how far or little you drive. All kilometre requirements have been abolished. 

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

    Absolutely!  Novated leases are available no matter the car type, model or make, unless specified by your employer’s agreement. You can lease a new or used or even your existing car. However, restrictions around the age of the car may apply.

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

    We may be able to transfer your current car if it’s financed through a personal loan or dealer finance, or under an existing novated lease. However, conditions may apply depending on your personal situation and employer’s policy.

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

    If you find that you’re spending LESS pre-tax funds than you budgeted for, you could have an excess of funds in your RemServ account.

    You can have these funds returned to you through your payroll as salary at anytime. You can also choose to adjust your budget if your running costs have changed. 

    When your leasing approaches the end, we’ll reconcile your account and if there is excess funds in your account, we will return the funds to you via your payroll within 60 days.  

    If you find you’re spending more than you budgeted, we’ll get in touch with you discuss adjusting your contribution amounts to ensure sure you have enough funds to cover your vehicle’s running costs.  Sometimes, when you find yourself driving more, the cost of your budgeted fuel is not enough to cover your increased driving activity.

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

    If your employment situation changes, the first thing to do is give us a call, so we can discuss your options. These can include:

    • 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)

    If your employer provides you a benefits, which could be included or in addition to your salary, it needs to pay FBT on that benefit. FBT is calculated on the taxable value of the fringe benefit and is not connected to income tax.

    For example, your employer offers novated leasing as a fringe benefit to you. As this benefit is not included in your salary or wages, it is therefore subject to FBT.

    To help offset any FBT you may be liable to pay on your novated lease, a  portion of your post-tax salary is also contributed towards the novated lease. This is known as the Employee Contribution Method (see ECM below).

    ECM (Employee Contribution Method)

    To help offset any FBT payable on the novated lease, you can use post-tax funds from your salary. They are classed as post-tax funds because they are taken from your salary after income tax has been deducted. The ECM portion will be outlined in your quote or you view the amount when you use our online calculator.

    The ECM method is an easier way to manage your lease. By using the ECM method (or post-tax deduction), you reduce the taxable value of the car, which reduces the FBT payable and also helps prevent a FBT liability at the end of a FBT year (31 March).

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