End of Lease

What happens if my Novated Lease is coming to the end of its term?

A Novated Lease is a Finance Lease between you and the financier (FleetPartners), which is novated to your employer through a Novation Agreement. If your Novated Lease is coming to an end, you might be wondering what happens next.  Whether your Novated Lease was for two, three, four, or five years, your options are exactly the same: you can extend your lease or finalise your lease by paying the Residual Value. Once you finalise your lease, you can either take ownership of the car or look at upgrading your car with a new novated lease. We’ll be in touch before your lease ends to discuss the options below.

Option 1: Pay out your lease and keep your car

Once your lease has been finalised by reconciling your running cost budgets and paying the residual value, ownership of the vehicle can be transferred to you by FleetPartners.

If you take ownership of the vehicle, it’s already registered in your name and you don’t need to transfer the registration with the relevant state or territory roads authority.

Option 2: Extend your lease

If you’d like to keep leasing your existing vehicle, you can extend the term of your lease providing it still meets our maximum vehicle age and kilometre limits and any other credit criteria. You’ll need to let us know before the initial term of your lease comes to an end so that we can provide you with a quote for the extended term.

Option 3: Upgrade to a new car

If you’d like to lease a different car, we’ll first need to finalise your current lease, including reconciling your running costs against your budgets and receiving payment for the residual value.

What’s involved in reconciling your Novated Lease when it ends?

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.

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.

What are my options if I wish to end my lease early?

At any time during your lease, whether before or after your employment has ended, you may request an early termination 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.

What happens to my Novated Lease if I’m made redundant or my employment has ended for any reason?

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.

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.

Please refer to Redundancy and your Novated Lease options to understand your options in more detail or download the guide. 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 is the Residual Value of my lease and how do I pay it?

The residual value is the amount payable at the end of the lease term. The minimum residual value is a percentage set by the ATO based on the term of the lease.

To finalise your lease, you will need to pay the residual value to FleetPartners. The amount of the residual value will be set out on your lease quote and your lease contract. You will receive an email containing a Tax Invoice for the GST inclusive amount of the Residual Value either 30 days prior to the end date of your lease, or if you have requested an early termination of your lease. Payment instructions are on the tax invoice and you pay the Residual Value directly to FleetPartners.

What you need to do if FleetPartners is no longer managing any of the vehicle running costs

Regardless of whether you’ve taken ownership of the car after the end of your lease, or FleetPartners is no longer managing your vehicle running costs due to a break in your Novation Agreement, from the date your Novation Agreement ends, you’ll need to make your own arrangements.

Registration

Once your Novation Agreement ends, it’s your responsibility to manage your vehicle’s registration from the next renewal as FleetPartners will no longer be an agent or contact point for your registration. As such, please make sure you:

know the expiry date of your current registration
contact your state Transport Authority to ensure they have your correct address associated with the vehicle, so they can send future renewal notices to you directly. Your vehicle is already registered in your name so there is no need to transfer the registration.

Comprehensive insurance

If your insurance is arranged through FleetPartners with Allianz, your comprehensive cover will end at 4pm on the day your Novation Agreement ends. You’ll need to arrange your own comprehensive insurance, otherwise your vehicle will be uninsured.

Roadside assistance

If you have roadside assistance arranged by FleetPartners, your cover will cease on the same day that your Novation Agreement ends. We recommend you arrange your own cover, so that if you breakdown, you can call your new provider for help.

CTP insurance

You’ll need to organise your own CTP insurance when your registration is next due for renewal.

Servicing and maintenance

You’ll need to arrange servicing and maintenance of your vehicle from the date your Novation Agreement ends, and will no longer be able to claim these costs as a reimbursement.

Fuel cards or charging tokens

Any fuel cards or charging tokens provided to you by FleetPartners will be cancelled at 8am (Sydney time) on the day your Novation Agreement ends. Once cancelled, all transactions will be declined – you’ll need to pay for these yourself.

Important considerations when your leased PHEV 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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