Novated leasing has become a popular way for Australian employees to finance a car using pre-tax income. But despite its widespread adoption, there are still plenty of misconceptions that stop people from taking advantage of its benefits.
In this article, we tackle some of the most common novated leasing myths — and set the record straight once and for all.
✅ Reality: Novated leasing is available to any salaried employee whose employer offers salary packaging — not just senior staff or high earners. In fact, many average-income Australians benefit significantly from the tax savings and budget control novated leasing offers.
✅ Reality: While novated leases are commonly used for new vehicles, you can also lease eligible used cars, provided they meet the financier’s age and condition criteria. This gives you flexibility based on your budget and preferences.
✅ Reality: With the right leasing partner, the process is surprisingly simple. At Prosperity Smart Drive, we handle everything from quotes and finance to setup and payroll coordination — making it a turnkey solution for both employees and employers.
✅ Reality: Changing jobs doesn’t mean you’re stuck with a lease you can’t manage. If you change employers, you can:
Transfer the lease to your new employer (if they support novated leasing), or
Take over the lease privately until a new arrangement is made.
There are options — you’re not locked in.
✅ Reality: It’s actually more beneficial. Eligible electric vehicles (under the Luxury Car Tax threshold) are exempt from fringe benefits tax (FBT), making novated leasing an EV a highly tax-effective option. Plus, running costs are usually lower than petrol or diesel cars.
✅ Reality: While you don’t own the car during the lease term, you can choose to buy it outright at the end by paying the residual value. Alternatively, you can refinance or upgrade to a new lease — giving you flexibility at every stage.
✅ Reality: With a reputable provider like Prosperity Smart Drive, everything is fully transparent. Your lease bundles all vehicle costs (registration, insurance, servicing, tyres, fuel/EV charging) into one regular deduction. There are no surprises — just simplified budgeting.
Novated leasing is often misunderstood, but the facts speak for themselves. When structured correctly, it’s a powerful way to reduce tax, drive the car you want, and take the hassle out of managing vehicle costs.
Don’t let misinformation hold you back from a benefit that could save you thousands.
Whether you’re looking to maximise tax savings, simplify your car expenses, or switch to an EV, Prosperity Smart Drive can help you find the right novated lease solution.
Prosperity Smart Drive (ABN 61 120 563 215) Prosperity Advisers Group © 2025
