There’s more than one way to finance a car, and the best option depends on whether you’re buying for yourself, for a business, or through your salary as an employee. The main choices are a car loan, where you own the vehicle and repay the finance; a lease, where the lender owns the vehicle and you pay to use it; and a novated lease, where an employee packages a vehicle through their pre-tax salary with their employer’s participation.
Each option carries different ownership, cash-flow and tax outcomes. A novated lease can be tax-effective for eligible employees and usually bundles running costs into one regular payment, while a car loan keeps things simple and leaves you owning the vehicle outright. The right choice comes down to your employment, how you use the car, and your preferences.
At Loanworx, we compare car finance and leasing options, explain how each works in plain terms, and match the structure to your situation. As an experienced finance broker, we work for you, and where tax is involved we coordinate with your accountant or employer so the structure aligns with their advice.
Weighing up a car loan, a lease or a novated lease? Call us on 1300 562 696 or get in touch and we’ll be back to you shortly.
The right option depends on ownership, tax and how you use the car. Here’s how the main ones work.
A novated lease is a three-way arrangement between you, your employer and a financier, where the vehicle is packaged through your pre-tax salary. It can be tax-effective for eligible employees and usually bundles running costs, fuel, servicing, registration and insurance, into one regular payment. It requires your employer to offer salary packaging.
With a car loan you own the vehicle and repay the finance; with a lease the lender owns it and you pay to use it, often with a residual at the end. Owning suits those who keep their cars; leasing can suit those who upgrade regularly or want lower outgoings. We compare both.
The best structure depends on whether you’re an employee with salary packaging available, a business, or an individual buyer, and on how long you keep your vehicles. We talk through your situation and match the option that fits, rather than pushing one structure.
A novated lease can be genuinely tax-effective for an eligible employee, but it isn’t the right answer for everyone, and a straightforward car loan is often the better fit. The wrong structure can cost you in flexibility or efficiency, even when it looks attractive on paper.
We compare car finance and leasing options, explain how each works for your circumstances, and match the structure to your employment, your usage and your preferences. Where tax or salary packaging is involved, we coordinate with your accountant or employer so the choice aligns with their advice.
Leasing is one of several ways to finance a car. Explore our other asset finance services below to find the structure that suits you.
Flexible personal finance for a car, travel, renovations, consolidation and life’s larger expenses.
Competitive finance to buy a car, new or used, for personal use, structured around your budget.
Vehicle and fleet finance for business through chattel mortgage, lease or hire purchase.
Finance for trucks, trailers and business equipment, sized to the asset and your cash flow.
Finance for excavators, loaders and heavy plant, new or used, for construction and earthmoving.
The right car structure depends on your situation as much as the vehicle. These are the factors we work through with you.
A novated lease needs your employer to offer salary packaging, so your employment situation is the starting point. Employees with packaging available may find a novated lease tax-effective; others are better suited to a car loan or lease.
We confirm what’s available to you first.
Whether the car is for personal use, business use, or a mix affects which structure suits and how it’s treated. Usage feeds into both the right option and, where relevant, the tax position.
We match the structure to how you actually use the car.
Car loan, lease and novated lease each carry different tax and cash-flow outcomes, and novated leasing in particular involves your pre-tax salary and FBT considerations. These are tax matters specific to you.
We coordinate with your accountant or employer on the treatment.
Leases and novated leases usually involve a residual or balloon at the end, which lowers regular payments but leaves an amount to settle later. The right balance depends on your budget and plans for the car.
We structure the payments and residual to suit you.
Different financiers suit different structures and offer different pricing, and a novated lease provider is not the same as a standard car lender. Matching the right financier to the right structure is where comparing the market pays off, and it’s exactly what we do for you.
Asset finance isn’t only about the headline rate. It’s about being matched to a lender that suits the asset, structuring the facility around your budget and, where relevant, your tax, and getting it approved quickly. Here’s what working with us looks like.
We compare asset finance across a broad panel of banks, second-tier lenders and specialist asset-finance funders, so you see a genuine spread of options rather than one lender’s offering. We match the asset and your situation to the lender most likely to approve it at a competitive rate.
Because the asset secures the loan, many deals can be approved on limited documentation and settled quickly. We know which lenders move fastest for which assets, so you can get the vehicle or equipment working without a drawn-out process.
The right structure depends on how you want to own the asset, manage repayments and, on the business side, treat it for tax. We compare the structures, including any deposit or balloon, and coordinate with your accountant where it’s a business asset.
For most asset finance, Loanworx is paid an upfront and trail commission by the lender after settlement, and that commission typically does not change the rate or fees you pay. Where a fee for service applies to a more complex scenario, we disclose it in writing before any work begins. No surprises.
A novated lease is a three-way arrangement between you, your employer and a financier, where you package a vehicle through your pre-tax salary. Your employer deducts the lease payments from your salary, usually including running costs like fuel, servicing, registration and insurance, and it can be tax-effective for eligible employees. It requires your employer to offer salary packaging. We can explain whether it suits your situation.
Your employer agrees to take on the lease obligation and deducts the payments from your salary, typically a mix of pre-tax and post-tax amounts, with the financier providing the vehicle finance. The arrangement usually bundles the car’s running costs into one regular payment. At the end of the term there’s a residual to pay, refinance or trade out of. The tax treatment depends on your circumstances, so we coordinate with your accountant or employer.
Generally, employees whose employer offers salary packaging. If your employer doesn’t offer it, a novated lease isn’t available to you, and a car loan or standard lease would be the alternative. Eligibility and the benefit also depend on your income and how you use the car. We’ll confirm what’s available to you and whether it’s worthwhile before recommending it.
Not always. A novated lease can be tax-effective for an eligible employee and bundles running costs into one payment, but a car loan is simpler, leaves you owning the vehicle outright, and doesn’t depend on your employer. The better option depends on your employment, how long you keep your cars, and your preferences. We compare both honestly so you can choose what suits you.
Typically the vehicle finance plus running costs, fuel or charging, servicing, registration, insurance and tyres, bundled into one regular salary deduction. The exact inclusions depend on the provider and the package. This bundling is part of the appeal, since it turns variable car costs into one predictable payment. We’ll set out what a given package includes so you can compare it fairly against a car loan.
Because the lease is novated to your employer, leaving your job ends that arrangement, and the lease obligation generally reverts to you or is novated to a new employer that offers packaging. You’d continue the payments directly or re-novate with the new employer. It’s an important consideration if your employment might change, and we’ll factor it into the advice so there are no surprises.
Talk through what you’re financing with an asset finance specialist, with no cost and no obligation. Call us on 1300 562 696 or get in touch and we’ll be back to you shortly, ready to find the right facility for your asset.
Disclaimer: The information provided here is general in nature and should not be considered financial, tax or legal advice. You should consult your professional advisers, such as your accountant, solicitor and financial planner, to see whether a particular finance strategy is suitable for your business, ahead of a discussion with us that will be limited to how to arrange any funding required.
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