Novated lease for employees - salary packaging benefits

What Happens to a Novated Lease if I Change Jobs?

Changing jobs is a normal part of working life, but if you have a novated lease, you might be wondering what happens to your vehicle financing when you leave your current employer. Since a novated lease is a three-way agreement between you, your employer, and a lease provider, it’s natural to have questions about how it works during a job transition.

The good news is, you have options. Whether you’re transferring your lease, continuing repayments yourself, or refinancing, there are practical steps you can take to keep your car and manage your financial obligations. This guide explains what to expect and how to handle your novated lease when you change jobs.

1. What Happens When You Change Jobs?

A novated lease is structured around your employment, with your employer responsible for making lease payments through salary deductions. When you leave that job:

  • The lease no longer operates as a novated agreement.
  • You become personally responsible for the repayments until a new arrangement is set up.
  • Fringe Benefits Tax (FBT) and salary packaging cease with your employment.

This shift means you’ll need to decide quickly how to handle the lease, especially if you’re in between roles or starting a new job soon.

2. Option 1: Transferring the Lease to a New Employer

This is the most seamless option if your new employer offers novated leasing.

How it works:

  • Your lease provider coordinates with your new employer to transfer the novated lease.
  • Your new employer agrees to deduct lease payments from your pre-tax salary.
  • Once processed, your novated lease continues under the new employer, with minimal interruption.

Key considerations:

  • Check early in the recruitment process whether novated leasing is supported.
  • There may be some paperwork or onboarding delays, so allow time for the transfer.

If your new employer allows salary packaging, transferring your novated lease is often the simplest and most cost-effective route.

3. Option 2: Your New Employer Doesn’t Offer Salary Packaging

Not all employers provide novated leasing as a benefit. If your new workplace doesn’t allow salary packaging:

  • Your lease will no longer be tax-effective.
  • Payments continue from your after-tax income.
  • You won’t lose your car, but you’ll lose the tax benefits that made the lease attractive in the first place.

This option may still be manageable, especially in the short term, but it can reduce the overall value of the lease if continued long term.

Learn More: What Happens at the End of a Novated Lease?

4. Option 3: Paying Out or Refinancing the Lease

If transferring the lease isn’t possible, or if you prefer to restructure your financing, you have two more options:

Pay Out the Lease

  • You can request a payout figure from your provider and pay the remainder of the lease in full.
  • This is useful if you’re financially able and want full ownership of the vehicle.

Refinance the Lease

  • Convert the remaining balance into a personal loan or other financing arrangement.
  • This may increase your monthly payments or extend the loan term depending on rates and terms.

These options allow you to keep the vehicle, but it’s important to understand any fees or residual value implications before proceeding.

5. Tips for Managing Your Lease During a Job Transition

Changing jobs can be stressful, but managing your novated lease doesn’t need to be. Here are some tips to make the transition smoother:

  • Contact your lease provider early – ideally before your last day at your current employer.
  • Speak to your new employer during contract negotiations and ask whether salary packaging is available.
  • Request a lease payout figure so you’re aware of your options.
  • Avoid payment gaps by arranging direct payments with the provider while you’re between jobs.

Being proactive ensures you stay in control of your lease and avoid unnecessary fees or complications.

Conclusion

So, what happens to a novated lease if you change jobs? In short, you don’t lose your car, but you will need to decide how to continue managing the lease. Transferring it to a new employer is often the easiest path, provided they support salary packaging. If not, you can still pay out or refinance the lease, keeping you on the road with minimal disruption.

Job changes don’t need to derail your novated lease. With a little planning and the right advice, you can maintain your financial position and make a smooth transition. For guidance specific to your lease, reach out to One Car Group for expert support and personalised solutions.