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A novated lease could be the answer
15 April 2025
Dreaming of a brand-new car, but worried break the bank?
Whether you’re looking to upgrade your current ride or make the switch to an electric vehicle (EV), getting the car you want might not be as expensive as you think. In fact, it could even help you increase your take-home pay by reducing your taxable income.
Sound too good to be true? With a novated lease for teachers, it’s not.
A novated lease is an Australian Tax Office (ATO)-approved way to lease a car using part of your pre-tax salary. Not only does it make it easier to afford and run a car, it also helps you save on tax. Here’s how it works.
A novated lease is a salary packaging arrangement that lets you pay for part of your car repayments and running costs from your pre-tax salary. This means you could pay less tax and increase your disposable income.
One of the great things about novated leasing is you get to choose the car you want – even that fire-engine red convertible you’ve had your eye on (we see you). With a novated lease, you can take your pick: a brand-new car, a second-hand car, or the one you already own (yep, you read that right!)*.
And if you have no idea what kind of car you want, Smart’s car buying service can help you find the right vehicle and organise stress-free test drives. When your novated lease comes to an end, we can help you sell your old car, too*.
Even better? Unlike some vehicle finance arrangements, when you choose a novated lease, there aren’t any restrictions on how or who uses your car. It’s yours for work and personal use – that means the daily commute, post-work dinner with friends, weekend trips out of town… Plus, your family can use it, too.
Let’s face it: owning a car isn’t just about the purchase price – it comes with ongoing costs like fuel, registration, insurance, servicing and even car washes. A novated lease helps cut down on these everyday expenses, by bundling them into your repayments, so they all come out of your pre-tax salary.
And when you lease a car through Smart, you can also access fleet discounts on servicing and repairs through our vehicle maintenance program, which can really add up over time.
The savings start straight away, as you won’t pay GST on the purchase price, which means an instant 10% saving^. If you’ve been thinking about going green, you could save even more. That’s because when you lease an eligible EV ^^, 100% of your lease and running costs can come out of your pre-tax salary, saving you thousands over the course of your lease.
A novated lease takes the stress out of getting a new car, making it easier and more affordable to get the car you need while saving on tax and running costs.
Ready to get started? Learn more about novated leases for teachers with Smart.
Disclaimers
*To package a used or current car, certain financier requirements must be met. Exact age requirements and minimum value depend on which financier you choose. Generally, vehicles should be less than 12 years old at the end of the lease term with a minimum value of $5,000.
^GST is not payable on the purchase price of a vehicle financed through a novated lease (GST savings are calculated on the FBT base value of the vehicle, up to the claimable limit [$6,334 in FY 2024-25] unless exempt).
^^ Fringe Benefits Tax (FBT) exemption available for eligible electric or hydrogen cell vehicles purchased through a novated lease up to the Luxury Car Tax limit ($91,387 in FY 2024-25). Plug-in Hybrid Electric Vehicles with leases commencing from 1 April 2025 are not eligible for this exemption.