That final lease payment is approaching.
So, what happens next?
When your novated lease ends, you have a few options to consider.
Whether you’re planning to upgrade your car, continue using your current vehicle, or take ownership, it’s important to understand what each path involves and how it can affect your finances and future plans.
Below is a breakdown of the three most common outcomes at the end of a novated lease.
Option 1: Upgrade to a New Vehicle
Many drivers choose to upgrade to a newer car once their lease term ends. This option allows you to start a new lease while arranging the sale or trade-in of your current vehicle.
What this involves:
- Receiving quotes for a new or replacement vehicle
- Organising the sale and payout of your existing lease
- Beginning a new lease term with continued salary packaging benefits
This is a common path for people who want access to newer technology, updated safety features, or simply a change in vehicle type. It also helps avoid the longer-term costs that come with maintaining an older car.
This may suit you if:
- Your current vehicle no longer meets your needs
- You would like the convenience of staying within the novated leasing structure
- You prefer not to deal with long-term vehicle ownership
Option 2: Refinance Your Current Vehicle
If you are happy with your car and it is still in good condition, you can choose to refinance it. This means extending your lease for another term (usually between one and three years) while continuing to make tax-effective payments.
What this involves:
- Refinancing the residual (balloon) amount left on your lease
- Selecting a new lease term that suits your circumstances
- Continuing salary packaging on repayments and running costs
Because you are only financing the remaining value of the vehicle, repayments may be lower than your original lease. This is a straightforward way to keep using a vehicle you are familiar with while retaining the tax benefits.
This may suit you if:
- Your car still fits your lifestyle and is in good working order
- You prefer lower lease repayments going forward
- You want to keep the tax benefits without starting over
Option 3: Pay Out the Lease and Own the Car
If you decide you would like to own your vehicle outright, you can pay the residual value at the end of the lease. Once the balance is paid, the vehicle becomes your personal property and the lease concludes.
What this involves:
- Requesting a payout figure from the financier
- Paying the residual value directly
- Receiving a final reconciliation report
- Any remaining pre-tax balance in your novated account is refunded through payroll (note: income tax may apply)
This option may appeal to those who want to transition away from novated leasing or who simply want to own the car they have been driving.
This may suit you if:
- You are ready to take full ownership of your car
- The residual value is manageable and you want to avoid further leasing
- You plan to keep the car for the long term
How Remunerator Supports You During the Process
When your lease is nearing its end, Remunerator will reach out to guide you through the next steps. We will explain your residual value, discuss your available options, and assist with any documentation required to complete the process.
Our team helps with:
- Providing updated vehicle quotes or refinance options
- Coordinating sale and payout processes
- Liaising with your employer’s payroll team
- Managing reconciliations and residual payments
This process is designed to be as straightforward as possible, and you will not need to manage it alone.
Not Sure What to Do?
Every driver’s situation is different. The right option depends on your vehicle’s condition, your future needs, and your financial goals.
If you are unsure, we can:
- Help you understand the figures involved
- Talk through your available options
- Compare the benefits and trade-offs of each path
- Support you in making an informed decision
Need help navigating your end-of-lease options?
You can contact the Remunerator team here to discuss your situation and receive personalised guidance.