A Novated Lease26 is a three-way agreement between you, your employer and Škoda Financial Services that allows you to pay for your car from your pre-tax income – which could save you money. With the option to bundle all your major running costs into the same easy payment as your car, including registration, compulsory third party insurance (CTP), comprehensive insurance, charging/fuel and maintenance, enjoying a car has never been easier.
• Reduce your income tax by paying for your new Škoda through pre-tax salary
• Save GST on the car finance
• Flexible finance terms of up to 5 years
• Budgeting made easy with the option to bundle all your running costs into one payment, automatically deducted from your salary by your employer each pay cycle
Select your car
Choose from a New or Used Škoda (car must be less than 8 years old at the end of the lease).
Check your eligibility
Check with your employer to see if you’re eligible for a Škoda novated lease.
Submit an application
Submit a credit application through your local Škoda Dealership.
Simply take your Škoda with you and continue to make the repayments directly or transfer your novation agreement to your new employer. If you or your new employer choose not to have the novation agreement transferred, the finance payments will need to be made from your post-tax salary and you will not have the option to bundle running costs into your payment.
If you are unsure whether a novated lease is right for you, please speak to your accountant or financial adviser. Škoda Financial Services Australia Pty Limited (ABN 20 097 071 460), Australian Credit Licence Number 389344
Škoda Choice32 is our Guaranteed Future Value program – a flexible finance solution that provides you with the assurance of knowing exactly what the minimum value of your vehicle will be at the end of your loan term, and gives you the option to trade in, retain or return your vehicle. The choice really is yours.
Škoda Insurance cover is designed with Škoda drivers in mind. It includes new for old replacement on vehicles less than three years old, genuine replacement parts, and you can pay in instalments at no extra cost. Now, that’s clever thinking.
With a car loan, you’d be making repayments with your post-tax salary. With a novated lease, your payment uses some of your pre-tax salary, which could lower your taxable income.
Your novated lease payments include your car finance along with registration, compulsory third party insurance (CTP), comprehensive insurance, charging/fuel, maintenance and tyres. We’ll discuss everything and allocate a tailored monthly budget. The best part is, your budget can be carried over to the next month, or paid out with your salary.
Yes, you can salary package electricity costs within your EV lease. You must be able to demonstrate specifically how much energy – and the cost of the energy – is going towards charging your EV. This can be either obtained through a separate smart meter installed in your home, or by purchasing a fast, in-home charger with the metering included within it.
If it’s included in the cost of the car, then the cable charger will be bundled neatly into your novated lease payment. Unfortunately, the current ATO rules don’t allow in-home wall box chargers or third-party chargers bought separately to be bundled into a novated lease.
A lot of public chargers, like those at shopping centres, are free to use. For the ones that require a payment, just keep the receipts and claim them through your budgeted account.
At the end of your lease there are three options available to you: Upgrade to a new car, which means you take out a new novated lease or other finance loan type that suits your needs. All you need to do is trade in your current vehicle and pay any amount owing. Extend your lease by refinancing the residual amount (the balloon payment you owe at the end of your lease) and keep making regular payments. Keep your car, buy your current car outright by paying the residual amount.
A residual value is the value of the car at the end of the lease term. The residual value is agreed when you take out a novated lease and is used to calculate the monthly lease payment. This value is incorporated into your novated finance lease. All novated leases require you to pay a residual (aka ‘balloon’) GST inclusive amount when the lease ends.
If you change jobs, you simply take the car with you and continue to make the car finance repayments directly or transfer your novation agreement to your new employer. If you or your new employer choose not to have the novation agreement transferred to your new employer, the finance payments will be for the car only and will need to be made from your post-tax salary and you will not have the option to bundle running costs into your payment.
There are no setup or ongoing costs for you, the employer. The lease is fully employee-funded.
Novated leasing is not limited to large corporations. Whatever the size of your business, you can offer this benefit to any of your employees who receive a regular salary.
The process is straightforward and Škoda Financial Services manages the administration, minimising work for your HR and payroll teams.
Your employee is responsible for the payments, but the employer facilitates the payments through payroll deductions.
Employers can claim input tax credits on lease payments, further reducing costs. Škoda Financial Services will provide you with an input-tax-credit (ITC) report.
Škoda Financial Services use the Employee Contribution Method (ECM) for novated leases. This is where a portion of the lease cost is deducted as an ‘employee contribution’ from your employee’s post-tax salary – effectively eliminating the fringe benefits tax (FBT) obligation. At the end of the tax year, we’ll send you a report with the total taxable value of your employee’s benefits and all the information you need for the Australian Tax Office.
Yes, there are tax incentives and exemptions for eligible low-emission vehicles in certain circumstances. Škoda Financial Services can advise on current incentives and benefits.
Employees can take the lease with them to a new employer or arrange to make personal payments. Our transition support ensures a smooth handover.
Employees have the option to refinance, purchase the car, or trade it in for a new car and a new lease.
Yes, Škoda Financial Services provides comprehensive support for payroll deductions, tax reporting and compliance.
Check our FAQs or contact our Finance Customer Support team for more help.