Novated leasing for used cars

It's double trouble with Leaselab. We also offer no-hassle novated leases for pre-loved cars. Here's how it works.

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Can I get a novated lease on a used car?

You sure can! Buying a car second-hand can save a ton of cash - but that’s just the beginning of the savings when you buy it using a novated lease.

People often assume that novated leases aren’t available to used car buyers. But that’s not true.

So, if you have your eye on a car that’s currently advertised, you can snap it up on a novated lease and access the benefits of that too. We’ll be happy to help.

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In summary:

Yes, you can get a novated lease on a used car. You’ll save on tax by paying for your used car pre-tax, avoid GST if you buy from a dealership and bundle all running costs into one predicable payment.
The car must be under 12 years old at the lease end and worth at least $5000.
You’ll miss out on fleet pricing discount available with new cars, but you’ll still enjoy substantial tax savings and convenience compared to buying outright or taking out a loan.

Read Our Guide to Novated

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What is a novated lease for second-hand cars?

A novated lease lets you finance a used vehicle using your pre-tax salary, which reduces your taxable income while bundling all your running costs into one predictable payment.

Here's what makes it appealing:

GST savings

You won't pay GST on your car when purchased through a dealership, or on running costs like fuel and servicing.

Tax savings

You can save thousands on your tax bill because you’re paying for everything using pre-tax income.

Convenience

Including your running costs with your novated lease means you get one regular, predictable monthly deduction – no more bill shock.

We’ve saved thousands, for thousands

With Leaselab, we help everyday Australians like you address the uncertainty and budgetary challenges associated with car ownership.

With all costs bundled and budgeted for in advance using pre-tax income, we help you enjoy smaller and smoother deductions with no surprises and bigger tax savings.

Read Our Guide to Novated

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Tips for getting a used car on a novated lease

Here’s what you should keep in mind if you’re thinking about getting a used car with a novated lease. As a general guide, we always suggest:

Purchasing a quality second-hand vehicle

Choose something with some factory warranty remaining for added protection and peace of mind. Out-of-warranty vehicles can lead to unexpected repair costs that aren’t covered by your lease package.

Buy through a dealership when possible.

Purchasing through a dealership allows you to avoid paying GST. It also provides a little more protection for the buyer. But if your heart is set on a particular private sale car, that’s ok – you’ll still save tax on the car purchase and tax and GST on the car’s running costs.

Check the vehicle age.

The general rule is that the vehicle cannot be more than 12 years old at the end of a lease. For example, you could put a car that’s five years old on a five year novated lease, but a seven year old car couldn’t exceed a three year novated lease.

Minimum value requirements.

Most financiers require the vehicle to be worth at least $5000.

Used cars vs new cars: What’s the trade-off?

The biggest downside: Used cars don’t offer you fleet pricing…

If you buy a new car, you can save thousands off the recommended retail price since Leaselab has access to fleet pricing.

But there are still plenty of ways to save

But even though a used car means you can’t benefit from fleet pricing, there are still plenty of ways for you to save a considerable sum compared to buying the vehicle outright or taking out a car loan. You’re still getting:

Tax savings through pre-tax payments
GST savings on running costs
Bundled costs
Predictable monthly repayments

Should you consider new instead?

Given the savings you can get on a new car, it might be worth considering whether that’s a viable option for you. After all, a new car will have a full warranty and a stronger resale value. No pressure, obviously.

We just want you to have all of the facts before making a decision.

Want to crunch the numbers for yourself? Add your details to our novated lease calculator or reach out for a personalised quote.

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Step-by-step guide: How to get a novated lease on a used car

Here’s what you should keep in mind if you’re thinking about getting a used car with a novated lease. As a general guide, we always suggest:

Choose your car

Pick a used car from a dealership or a private seller. The car needs to meet the financier's criteria. Generally, the vehicle should be less than 12 years old and have a minimum value of $5,000.

Set up the novated lease with Leaselab

We’ll handle everything: setting up the lease, coordinating payment with your employer and getting the best deal on your finance application for your second-hand car. Plus, with a dedicated account manager on your lease, there’s always a constant line of clear communication.

Drive your dream car

Your lease payments and running costs are automatically deducted from your salary. It’s easy, predictable and maximises your tax.

Is a used car novated lease right for you?

Consider a novated lease for a used car if you:

Want to save significantly on the purchase price
Are looking to stay in your job and want to decrease your tax
Have found a quality used vehicle with warranty remaining
Prefer predictable, bundled costs when it comes to your car
Want to avoid the depreciation hit of buying new

Think twice if:

You’re thinking about changing jobs soon
The vehicle you want is out of warranty with potential repair issues
You’re buying privately and missing GST savings
You haven’t compared whether fleet pricing on a new car might actually deliver better value

Need some guidance on a novated lease for a used car?

If you have a particular used vehicle in mind but haven’t found it yet, we might be able to help. We offer independent, comprehensive insights from our years of experience finding the right novated lease package for people’s unique situations, and through our extensive network we can likely find the car you want. Give us a shot. We love to share our knowledge on novated leasing and are used vehicle specialists.

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Frequently Asked Questions

Is insurance included in a novated lease for used vehicles?

You can bundle comprehensive car insurance into any novated lease, even for used cars. The cost simply gets added into your regular lease payments alongside any other running costs like fuel, servicing and registration, making budgeting straightforward and predictable.

When leasing a used car, do I have to buy it first?

Not at all. Simply pick your preferred car and price the dealer or private seller details to your dedicated leasing consultant. We’ll handle the procurement process for you, no need to purchase it yourself first.

What happens to the balloon payment at the end?

At the end of the novated lease for your second-hand car, you'll have three options:

Pay the balloon payment and own the car outright
Sell the car (often for more than the balloon amount) and pocket the difference tax-free
Refinance the balloon into a new novated lease

The balloon payment is set by ATO guidelines based on your lease term and is typically lower than the car's market value.

What happens to my used car novated lease if I change jobs?

Your novated lease can usually transfer to your new employer if they offer salary packaging. If they don't, you can either:

Continue the lease with after-tax payments
Pay out the lease early
Sell the vehicle
See if your employer is willing to sign up to salary packaging

Can I choose my own insurance and service providers?

Absolutely. You have the flexibility to select your preferred insurance provider and choose where your car gets serviced, giving you control over costs and quality.

What about maintenance and repairs on older vehicles?

Used cars, especially those out of warranty, can face unexpected repair costs. That’s just the reality of the situation. While regular servicing can be bundled into your lease, major repairs aren't typically covered. Consider: