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1. What is a novated lease?
A novated lease is a three-way agreement between you, your employer, and a finance provider. Your employer makes the car payments on your behalf using your pre-tax salary.
It’s often advertised as a “tax-effective” way to get a car, but it’s not always the best option.
2. Pros and cons of novated leases
Pros:
- Payments come from your pre-tax income
- Often includes running costs (fuel, rego, servicing)
Cons:
- You must stay with your employer to keep the lease
- Limited car choice (often new vehicles only)
- Can be complex to manage
- Potential hidden fees and balloon payments
If you leave your job, you may be left responsible for the lease or required to pay it out.
3. How a car loan is different (and often better)
A car loan gives you full ownership of the vehicle from day one. It’s straightforward, flexible, and doesn't tie you to your employer.
Benefits of a car loan:
- Total freedom to choose the car you want (new or used)
- No employer involvement
- Fixed repayments with optional early payouts
- Easier to understand and manage
4. Which one suits you?
If you value flexibility, freedom of choice, and simplicity — a car loan is often the better long-term option.
While novated leases work for some, they’re not ideal for everyone, especially if you’re unsure about your employment situation or don’t want to be locked into a fixed agreement.
Need help deciding?
At Hanna Lending Services, we specialise in fast, tailored car finance — with no employer contracts or confusion.
👉 Get approved online in under 30 seconds or reach out for expert advice.
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