Redundancy and your Novated Lease options
What happens to my Novated Lease if I’m made redundant?
Being made redundant can be a difficult time. When you have a Novated Lease with FleetPartners, we are here to help and work with you to understand the best option for your situation.
A Novated Lease is a Finance Lease between you and the financier (FleetPartners), which is novated to your employer through a Novation Agreement. When your employment ends (whether due to resignation, redundancy or any other reason), the Novation Agreement between you, FleetPartners and your employer terminates. There are several options available to you at this point, including terminating the lease, continuing to make payments directly to FleetPartners, or novating your Finance Lease to a new employer (either immediately or down the track). There are important considerations for each of these options, and you should consider which is best for you.
Contact FleetPartners on 1300 666 001 (Option 2) as soon as possible once you are aware your employment is ending so we can discuss your options and work out how you’d like to proceed before your employment ends.
What will happen when my Novation Agreement terminates?
End of the Novation Agreement between you, your employer and FleetPartners
On the last day of your employment, your Novation Agreement with your employer will be terminated. The Finance Lease between you and FleetPartners will continue on its existing terms, but you will now be responsible for making payments directly to FleetPartners (rather than your employer making payments from your salary).
Reconciling your running cost budgets up to the time the Novation Agreement ends
Termination of your Novation Agreement means that your lease will become a finance only arrangement, and all bundled services currently provided by FleetPartners will cease. Our team will prepare a reconciliation of your budgets against your actual spend and issue a copy to you and your employer.
If your budgets are more than your actual spend, the surplus funds will be returned to your employer to be processed through your payroll to ensure the appropriate tax treatment.
If your final reconciliation ends with a balance owing to FleetPartners (because your actual running costs exceeded your budgets), we will issue an invoice to your employer to deduct the balance from your final pay. If that’s not possible (for example, because you have already received your final salary payment from your employer), FleetPartners will invoice you directly for the amount and provide you with payment details to finalise the payment.
Your employer will complete a payroll reconciliation and any necessary deductions or refunds to balance your running cost budgets, subject to any pay as you go (PAYG) withholding tax that may apply. The final reconciliation also includes a Fringe Benefits Tax (FBT) reconciliation and possible payroll adjustments may result to ensure the FBT obligations were met while the vehicle was under novation.
How your lease costs and running costs will be affected by the novation ending
It’s important that you make arrangements to ensure essential services such as insurance and registration continue, as these services will not continue when your lease reverts to a finance only arrangement. The services managed by FleetPartners will end on the date your Novation Agreement ends, and you will need to make alternative arrangements from that point forward.
The monthly Finance Lease cost will be payable by you under a direct debit arrangement.
You will need to manage the ongoing registration and insurance of your vehicle. If you are currently insured under FleetPartners’ policy with Allianz, your cover will end at 4pm on the day your Novation Agreement terminates, and you will need to arrange alternative cover from that time.
If you have a fuel card issued by FleetPartners, this will also be cancelled with effect from 8am (Sydney time) on the day your Novation Agreement ends.
You will also be responsible for ongoing servicing and maintenance of the vehicle.
For further information, please refer to our End of Lease hub at https://www.fleetpartners.com.au/resources/forms-and-guides/end-of-lease. What are my options after the Novation Agreement ends?
You can:
1. Continue with your Finance Lease, making monthly repayments to FleetPartners directly
We’ll send you a direct debit authority for your monthly Finance Lease payment. You will need to sign and return the direct debit agreement, and we will set up the direct debit on your behalf.
2.If your new employer offers FleetPartners novated leases, novate your existing lease to your new employer
When you have secured new employment, our team can help you re-novate your lease to your new employer. When you re-novate your lease, we can recommence providing bundled services and managing your running costs budgets. However, your budgets will start fresh from the date of the novation to your new employer, as the budgets for the original Novation Agreement are reconciled when that Novation Agreement terminates.
You can choose to re-novate to a new employer right away, or after a period of time making payments directly to FleetPartners.
How to process a re-novation with FleetPartners:
- Obtain a novated lease quote
Our team prepare a quote to transfer your lease to your new employer. Your new quote can again include budgets for running costs. - Execution of new Novation Agreement
Once you have signed your new quote, our team will issue you with a new Novation Agreement between us, you and your new employer to be signed and returned to us. If your new employer isn’t currently supporting FleetPartners Novated Leases, they’ll need to agree to the Novation. - Lease transferred
You will no longer need to make payments directly to FleetPartners, as your payments will once again be made by your employer from your salary. Your previous direct debit arrangement will be cancelled. Your included running cost budgets will resume and any bundled services through FleetPartners such as comprehensive insurance or fuel cards will be activated.
3. Transfer to your new employer’s novated leasing provider
If your new employer has a different novated leasing provider, and your lease is financed by FleetPartners, you can engage with your employer’s novated lease provider to transfer your Finance Lease payment obligation to them.
How to process a transfer to another novated lease provider:
- Obtain a novated lease quote;
Contact your employer’s novated lease provider and request a quote to transfer your lease to your new employer. - Execution of a new Novation Agreement
Contact FleetPartners to arrange a new Novation Agreement between us, you and your new employer to be signed and returned to us, and your new novated lease provider. - Lease transferred
You will no longer need to make payments directly to FleetPartners, as your payments will once again be made by your employer from your salary. Your previous direct debit arrangement will be cancelled.
What are my options if i don’t wish to continue leasing the vehicle?
At any time during your lease, whether before or after your employment has ended, you may request an early payout of your lease. Our team will provide the early payout figure to you, together with an email explaining what you need to do if you wish to proceed with the early termination.
It is important to note that terminating your lease early attracts early termination fees and charges, including payment of the residual value that is otherwise payable at the end of the lease. You can read more in your lease agreement.
Once your lease has ended, ownership of the car will be transferred to you.
Important considerations when your leased car is considered FBT exempt under the electric cars exemption
If your car is a plug-in hybrid electric vehicle (PHEV) and your lease commenced before 1 April 2025, you may currently receive the electric cars fringe benefits tax (FBT) exemption. From 1 April 2025, the exemption no longer applies to leases that are varied – this means that even if you re-novate your lease to a new employer, you will not be able to access the FBT exemption.
You can read more on the Australian Taxation Office (ATO) website.
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