KEY TAKEAWAYS
  • The novation and salary deductions generally stop when employment ends.
  • You remain responsible for the underlying finance obligations.
  • A new employer may accept a fresh novation if it supports the arrangement.
  • Direct payments, payout, refinance, sale or transfer may be possible depending on the contract.

The lease has two connected parts

A novated lease links a finance agreement with an employment-based deed of novation. Your employer agrees to make payments and salary deductions while the novation operates. When employment ends, that deed usually stops—but the employee's obligations to the financier continue.

Moving the lease to a new employer

If the new employer offers novated leasing, its salary-packaging provider may be able to establish a new deed and take over administration. It will need information about the existing lease, financier, running-cost account and vehicle. Approval is not automatic, and the new provider's fees and budgeting method may differ.

Paying the finance directly

During a gap between employers—or where the new employer does not participate—you may have to make the scheduled finance payments from after-tax income. The running-cost account and salary-packaging tax treatment may also stop. Contact the financier and current provider before the final pay cycle so you know the amount, due date and payment method.

Act before your last day

Ask for the provider's employment-termination process, current account balance, next finance due date and transfer documents while payroll access is still active.

Other options

Pay out the lease

Request a dated payout figure from the financier. Early termination can be expensive because it reflects the contract balance, residual and applicable adjustments—not just the remaining headline repayments.

Sell or trade the car

Sale proceeds may be used to clear the payout. You fund any shortfall if the sale price is lower.

Refinance

A conventional car loan may replace the lease, subject to credit approval. Compare the new interest, term, fees and total cost.

Unpaid leave, redundancy and parental leave

A temporary reduction or stop in salary can also interrupt deductions. Employer policy determines whether packaging can continue and how arrears or direct payments are handled. Before extended leave, ask payroll and the provider for the written process and model the after-tax cash-flow impact.

EV arrangements need extra care

Where an EV is receiving a particular FBT discount, transferring or materially changing the arrangement can raise continuity questions, especially as the scheduled rules change from April 2027 and April 2029. Obtain date-specific advice before refinancing or restructuring.

Residual and payout guide →EV FBT timetable →Discuss your situation →

General information: Your finance contract, deed, employer and provider procedures control the outcome. Request written figures and instructions for your arrangement.