Novated Lease

Drive your salary further with a Volkswagen Novated Lease

A Novated Lease is a three-way agreement between you, your employer and Volkswagen Financial Services1 that allows you to pay for your car from your pre and post-tax income – which could save you money. With the option to bundle all your car-related expenses into the same easy payment as your car, including registration, compulsory third party insurance (CTP), comprehensive insurance, charging/fuel and maintenance, enjoying a car has never been easier.

Your benefits

  • – Reduce your income tax by paying for your new Volkswagen through pre-tax salary
  • – Save GST on the car finance
  • – Flexible finance terms of up to 5 years
  • – Budgeting made easy with the option to bundle all your car-related expenses into one payment, automatically deducted from your salary by your employer each pay cycle

Employee Guide

Novated Lease Employee Guide explains how a novated lease works, its benefits, and what ongoing driving costs can be included.

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Employer Guide

Novated Lease Employer Guide provides employers with information, guidance and the benefits on offering novated leases to their employees.

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How it works

  1. Select your Volkswagen – new or used (car must be less than 8 years old at the end of the lease)
  2. Check to see if you’re eligible for a Volkswagen Novated Lease with your employer
  3. Submit a credit application through your local Volkswagen Dealership
  4. Sign the lease agreement – your employer will need to sign the novation agreement
  5. Pick up your Volkswagen

If you change jobs, you simply take the car with you and continue to make the car finance repayments directly or transfer your novation agreement to your new employer. If you or your new employer choose not to have the novation agreement transferred to your new employer, the finance payments will be for the car only and will need to be made from your post-tax salary and you will not have the option to bundle running costs into your payment.

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If you are unsure whether a Novated Lease is right for you, please speak to your accountant or financial adviser.

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Employee specific FAQs

What’s the difference between a novated lease and a traditional car loan?

With a car loan, you’d be making repayments with your post-tax salary. With a novated lease, your payment uses some of your pre-tax salary, which could lower your taxable income.

What’s included in my novated lease payments?

Your novated lease payments include your car finance along with registration, compulsory third party insurance (CTP), comprehensive insurance, charging/fuel, maintenance and tyres.

We’ll discuss everything and allocate a tailored monthly budget. The best part is, your budget can be carried over to the next month, or paid out with your salary.

Can I package up the cost of charging my EV from home?

Yes, you can salary package electricity costs within your EV lease. You must be able to demonstrate specifically how much energy – and the cost of the energy – is going towards charging your EV. This can be either obtained through a separate smart meter installed in your home, or by purchasing a fast, in-home charger with the metering included within it.

Can I package up the cost of buying and installing and EV charger at home?

If it’s included in the cost of the car, then the cable charger will be bundled neatly into your novated lease payment. Unfortunately, the current ATO rules don’t allow in-home wall box chargers or third-party chargers bought separately to be bundled into a novated lease.

Can I claim the cost of using a public charger?

A lot of public chargers, like those at shopping centres, are free to use. For the ones that require a payment, just keep the receipts and claim them through your budgeted account.

What happens at the end of my novated lease?

At the end of your lease there are three options available to you:

Upgrade to a new car, which means you take out a new novated lease or other finance loan type that suits your needs. All you need to do is trade in your current vehicle and pay any amount owing.

Extend your lease by refinancing the residual amount (the balloon payment you owe at the end of your lease) and keep making regular payments.

Keep your car, buy your current car outright by paying the residual amount.

What is a residual value?

A residual value is the value of the car at the end of the lease term. The residual value is agreed when you take out a novated lease and is used to calculate the monthly lease payment. This value is incorporated into your novated finance lease. All novated leases require you to pay a residual (aka ‘balloon’) GST inclusive amount when the lease ends.

What happens if I change jobs during my novated lease term?

If you change jobs, you simply take the car with you and continue to make the car finance repayments directly or transfer your novation agreement to your new employer. If you or your new employer choose not to have the novation agreement transferred to your new employer, the finance payments will be for the car only and will need to be made from your post-tax salary and you will not have the option to bundle running costs into your payment.


Employer specific FAQs

What are the set up or ongoing costs over the term?

There are no setup or ongoing costs for you, the employer. The lease is fully employee-funded.

What kinds of employers can offer novated leases?

Novated leasing is not limited to large corporations. Whatever the size of your business, you can offer this benefit to any of your employees who receive a regular salary.

Will this program create extra work for our organisation?

The process is straightforward and Volkswagen Financial Services manages the administration, minimising work for your HR and payroll teams.

Who is responsible for the car lease payments?

Your employee is responsible for the payments, but the employer facilitates the payments through payroll deductions.

How are GST credits handled?

Employers can claim input tax credits on lease payments, further reducing costs. Volkswagen Financial Services will provide you with an input-tax-credit (ITC) report.

How are FBT obligations met?

Volkswagen Financial Services use the Employee Contribution Method (ECM) for novated leases. This is where a portion of the lease cost is deducted as an ‘employee contribution’ from your employee’s post-tax salary – effectively eliminating the fringe benefits tax (FBT) obligation. At the end of the tax year, we’ll send you a report with the total taxable value of your employee’s benefits and all the information you need for the Australian Tax Office.

Are there government incentives for low-emission vehicles?

Yes, there are tax incentives and exemptions for eligible low-emission vehicles in certain circumstances. Volkswagen Financial Services can advise on current incentives and benefits.

What happens if an employee with a novated lease leaves?

Employees can take the lease with them to a new employer or arrange to make personal payments. Our transition support ensures a smooth handover.

What happens at the end of the lease?

Employees have the option to refinance, purchase the car, or trade it in for a new car and a new lease.

Is there any liability for our organisation?

No, the lease is the employee’s responsibility, and they take it with them if they leave.

Will Volkswagen Financial Services help with payment calculations and reporting?

Yes, Volkswagen Financial Services provides comprehensive support for payroll deductions, tax reporting and compliance.

What happens if an employee takes unpaid leave?

Employees must make alternative payment arrangements during unpaid leave. We help the employee transition to personal payments.

Novated Finance

ID. 4 Pro
from $169 per week2 with a novated finance only lease

Potential tax savings $25,105 over 5 years.3 Offer ends 30 September 2025. Price may vary depending on your individual circumstances and state/territory. Requires your employer to be willing to participate.

Next steps

If you are unsure whether a Novated Lease is right for you, please speak to your accountant or financial adviser.

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Make a finance enquiry

Disclaimer by Volkswagen

  1. Volkswagen Financial Services Australia Pty Limited (ABN 20 097 071 460), Australian Credit Licence Number 389344.
  2. All eligible vehicles must be ordered before 30 September 2025 (unless extended), or while stocks last. Displayed price is only available when you enter a novated lease with Volkswagen Financial Services (VFS) ABN 20 097 071 460, Australian Credit Licence Number 389344 which is administered by Oly Pty Ltd ABN 69 674 252 629 (Oly) in Western Australia. Vehicle prices in other states may vary. Estimated weekly costs have been determined based on the following assumptions: 1) The lease is an Oly Novated Finance Only Lease, 2) A 5-year term, 3) A residual value of 28.13% of the vehicle purchase price payable at the end of term, 4) Novated lease repayments only cover financing, i.e. car repayments and excludes all other car-related costs, 5) Gross annual salary is $120,000. 6) Vehicle purchased in WA, 7) Vehicle is an eligible electric car that meets the requirements for Fringe Benefits Tax exemption, including a retail value under the luxury car tax (LCT) threshold of $91,387. Employee Contribution Method (ECM) will be applied where vehicles exceed the LCT threshold of $91,387. The indicative price quoted for the novated lease is based on vehicle quotations obtained within the last 45 days before first publication of this ad and does not include any optional extras. Any optional extras that you choose will affect the cost of the novated lease and residual value. If you purchase the vehicle on termination of the novated lease, GST will apply on the purchase price you pay at that time. The novated lease offer is based on the assumptions outlined above and is an indicative cost approximation of the selected vehicle and model shown and the amounts may change at the time the novated lease quotation is completed and finalised. Your individual circumstances have not been taken into account as this will affect the overall weekly cost amount and the benefits of a novated lease. These specials cannot be used in conjunction with any other offer. For this purpose, any optional extension of the agreement is not considered binding. Oly may pay and/or receive a commission from VFS in connection with a novated lease. Oly and VFS recommends that you seek independent financial and taxation advice.
  3. Savings shown are indicative and reflect estimated tax savings over the full-term of the lease. The indicative total amount saved is a comparison between a novated lease based on the assumption outlined above and the purchase of a vehicle and payment of running and maintenance costs using post-tax earnings. Actual savings will depend on your personal circumstances. Oly and VFS recommends that you seek independent financial and taxation advice.
    App-Connect is compatible with selected apps and the latest smartphone versions of iOS and Android. Active data service is required. For USB connections, a connection cable is sold separately. For wireless connections, App-Connect features wireless Apple CarPlay® and wireless Android Auto™.
    The figures stated are for the purposes of comparison amongst vehicles tested under the same testing procedures only. The actual figure may vary depending on multiple factors such as fuel quality, vehicle load, environmental and road conditions
    Fuel consumption figures according to ADR 81/02 derived from laboratory testing. Factors including but not limited to driving style, road and traffic conditions, environmental influences, vehicle condition and accessories fitted, will in practice in the real world lead to figures which generally differ from those advertised. Advertised figures are meant for comparison amongst vehicles only.
    Leather appointed seats have a combination of genuine and artificial leather, but are not wholly leather.
    With rear seat in the forward position.
    Safety technologies are designed to assist the driver, but should not be used as a substitute for safe driving practices.