Benefits of a novated lease


Pay no GST on the purchase price of your vehicle - saving you 10% on the price of your car.


Save on tax

Your car repayments and running costs are paid mostly with pre-tax dollars so you enjoy a lower tax rate.


Fuel savings

Enjoy $0.04 off per litre with your own fuel card.


Save thousands on your next car

Mitsubishi Triton

Mitsubishi Triton GLX

Weekly cost:


Annual savings: 


Lease term savings:  


Mitsubishi Triton

Mercedes-Benz GLA 180

Weekly cost:


Annual savings: 


Lease term savings:  


Mazda CX-5

Mazda CX-5

Weekly cost:


Annual savings: 


Lease term savings:  


Mitsubishi Triton

Hyundai i30

Weekly cost: 


Annual savings: 


Lease term savings:  



How it works

How it works

A novated lease is an agreement between your employer, a finance company and yourself.

When you choose the car you want, you then enter into a finance agreement in your own name. Then you, your employer and the finance company all sign a novation agreement.

Your employer will make the monthly lease payments to the finance company, and you can use the vehicle as part of a salary packaging arrangement. With that agreement, most of the lease, running costs of the vehicle and fringe benefits tax (FBT) are deducted from your pre-tax salary. Your income tax is then calculated on your reduced salary, which can increase your net disposable income.

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Common questions about novated leasing

If your employer offers Novated Leasing as a salary packaging option, you can select a vehicle that suits your lifestyle. You can choose the make and model, new or used, sedan, wagon, 4WD, etc., without any of the restrictions usually found with a traditional company fleet. You purchase the vehicle and then enter into a finance agreement in your own name.

Once you've purchased the vehicle, you, your employer and the finance company all sign a Novation Agreement. Your employer agrees to take on your obligations (repayments) to the finance company, and is responsible for all of the agreed vehicle expenses which are deducted from your remuneration as part of your salary packaging arrangement.

You agree to "salary sacrifice" a portion of your earnings in return for the benefit of a car equal to that amount. With a Novated Lease, the lease, running costs of the vehicle and Fringe Benefits Tax (FBT) are deducted from your pre-tax earnings, and PAYG income tax is calculated on your reduced salary. This can effectively increase your net disposable income as you pay less tax.

If you are working full time or permanent part time and your employer supports salary packaging - you're eligible.

Novated Leasing offers a range of benefits for both employees and employers.

Novated Leasing offers many benefits for employees:

  • A Novated Lease is both cost and tax effective. Your salary packaged vehicle costs are paid from your pre-tax income. Paying with pre-tax dollars means that you enjoy a lower rate of tax on the benefit than if you were to pay for the running costs of the vehicle using after tax income. You save money.
  • Freedom to select the vehicle of your choice. This is because a salary packaged vehicle is not part of the company fleet.
  • The vehicle is yours to use 100% of the time. The vehicle is yours and there are no restrictions on who can drive it.
  • Your lease and your vehicle are portable. If you change jobs, you can take them both with you and enter into another Novation Agreement with your new employer and the financier.
  • You benefit from any equity built up in the vehicle during the term of the lease. Any profit realised on the sale of the vehicle at the end of the lease is tax-free.
  • Lease repayments are fixed for the term of the lease.
  • You can select flexible lease terms from 12 to 60 months (one to five years).
  • You can select flexible lease residuals, bearing in mind the Australian Tax Office (ATO) minimum residual guidelines for leases and the financier's maximum residual guidelines.
  • Under a Novated Lease, the financier applies an Input Tax Credit (ITC) to remove the GST from the amount financed. This means that your repayments will be lower as you finance a reduced, GST-exclusive amount.
  • Under a salary packaging arrangement all finance and operating costs for the vehicle are known as a "related benefit" and are GST and income tax-exempt.


Novated Leasing also offers a number of benefits for employers:

  • The ability to provide more flexible remuneration to employees at little-or-no cost to your business.
  • Significant savings of time and money compared to the administration of a company fleet.
  • Elimination of the residual-value risk of a company fleet.
  • The employer is not responsible for the vehicle if an employee leaves, and is not left with vehicles surplus to requirements.
  • Vehicles provided under a Novated Lease are "off balance sheet" - neither an asset nor a liability.
  • Reduced employee on-costs, such as Payroll Tax and WorkCover premiums.
  • Vehicle finance
  • Comprehensive insurance (or you can arrange your own)
  • Registration
  • Fuel
  • Maintenance such as servicing, tyres, battery replacement and repairs
  • Roadside assistance

*The repayment estimates are provided by Stratton Finance Pty Ltd. Information is current as at 11 October 2018 and is subject to change. All calculations are based on a 60 months term, 15,000km per year, $80,000 annual salary, Victoria RRP drive away price as of 11/10/8 and standard ATO residual guidelines. All calculations shown include a number of assumptions and are for illustration purposes only and serve as a guide only as to savings that you might achieve from salary packaging a vehicle via a Fully Maintained Novated Lease. These calculations and illustrations do not represent or replace professional finance and tax advice. Stratton accepts no responsibility for reliance on the calculations provided above.

The weekly repayment of $195 per week is for a new 2018 Mitsubishi Triton and is based on a driveaway price of $35,490. The weekly repayment of $251 per week is for a new 2018 Mercedes-Benz and is based on a driveaway price of $49,777.50. The weekly repayment of $184 per week is for a new 2018 Mazda CX-5 and is based on a driveaway price of $33,490. The weekly repayment of $155 per week is for a new 2018 Hyundai i30 and is based on a driveaway price of $24,990.


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