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Novated leasing for used cars

Novated leasing for used cars

Get big tax savings on a second hand car you love

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What is a novated lease on a used car?

Novated leasing is a salary packaging arrangement with your employer that lets you use pre-tax income for car finance and expenses. It’s not limited to brand new cars.

By leasing a second hand car with SmartTM, you could save thousands every year in income tax.

Generally, used cars can be salary packaged on a novated lease if the vehicle is less than 12 years old at the end of the lease term with a minimum value of $5,000*.

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Benefits of leasing a used car through a novated lease

Salary packaging a used car through a novated lease can give you the same tax benefits as leasing a new one.

Plus, you could benefit from lower repayments due to reduced upfront costs of second-hand vehicles.

Lower purchase prices could mean smaller lease payments
Used cars may depreciate slower compared to new cars~
No GST on the purchase price when purchased via a dealer^
Flexible vehicle choice
GST discount on running costs, no matter how you buy your car
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Step-by-step guide: How to get a novated lease on a used car

Choose your car

Pick a used car from a dealership or private seller. The car will need to meet the criteria of the financier – generally that the car is less than 12 years old at the end of the lease term with a minimum value of $5,000.

Set up the novated lease with Smart

From setting up the lease to coordinating with your employer – Smart will do all the legwork to make it simple for you. Speak with one of our dedicated consultants to finalise your lease package and finance application.

Drive & Enjoy

Your lease payments and running costs are deducted from your salary.

Use our novated lease used car calculator

Smart’s novated lease calculator can provide you with estimated tax savings and novated lease payments for used cars.

You can get instant results, and it’s simple to use.

You start by choosing your preferred car. For a used car, you can adjust the year of the car, and it may show a default price based on Redbook’s estimated median value for the make, model and year you select. This can be adjusted, for instance, if you know the payment price of the used car you want.

You can then go through a few simple steps to refine your choices, such as estimated running costs. The estimated tax savings and novated lease payments are updated and shown as you go.

Calculate your savings
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What to consider when leasing a used or second-hand car?

  • Vehicle age and condition: You need to ensure that the used car meets the eligibility requirements of the chosen financier. Generally, the used vehicle must be less than 12 years old at the end of the lease term with a minimum value of $5,000.
  • Dealer vs. Private purchase: The tax benefits can vary depending on whether you purchase the used car via a dealer or private sale. When you purchase through a dealer there is no GST on the purchase price^. However, this tax benefit is generally not relevant to private sales as most do not attract GST.
  • Inspection & Valuation: The used car may require a formal inspection before being approved for the lease, if the used car is purchased via private sale.
  • Warranty & Maintenance: Consider whether the car is still under manufacturer warranty or if you’ll need to budget for additional repairs. Your novated leasing budget can be amended to factor in likely additional repairs.
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Used Car FAQs

Can you lease a used car?
Are used electric vehicles (EVs) eligible for the Fringe Benefits Tax exemption?
When leasing a used car, do I have to buy it first?
How much tax can I save with a novated lease on a used car?
Is insurance included in a novated lease for used vehicles?

Visit Smart FAQs for more answers

Important information

This is general information only. Before entering into any salary packaging or novated leasing arrangement, you should consider your objectives, financial situation and needs, and seek appropriate legal, financial or other professional advice based upon your own particular circumstances. The availability of benefits is determined by your employer. Conditions and fees apply. Smartsalary Pty Ltd, ABN 24 096 796 100, a Smart™ company.

* 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.

~ Source: Should I buy a new or used car? Is a new car worth the cost? | RACV.

^ GST savings are calculated on the FBT base value of the vehicle, up to the claimable limit [$6,334 in FY 2025-26] unless exempt.