Can you get a novated lease for your car?

Where Can I Find the VIN (Vehicle Identification Number)?

The vehicle identification number (VIN) is composed of 17 characters (digits and capital letters) that act as a unique identifier for the vehicle. A VIN displays the car's unique features, specifications and manufacturer.

The VIN can be found in a couple of places including on the car's registration label (1), on the compliance plate in the engine bay (2) or on the passenger side windshield (3), or on one of the door posts (where the door latches when it is closed) (4). See the image below:

Look for the VIN in these other locations:

  • Insurance card/Insurance policy
  • Vehicle title and registration certificate


If you're looking at buying a second-hand car, how are you going to afford it? Most people will have either saved up their money or taken out a bank loan, but a growing number of Australians are turning to novated leasing.

A novated lease is an arrangement where you pay for your car from your wages before they're taxed. It means you can lower the amount of income tax you pay and get a car, while your employer reduces their payroll tax commitments.

21 per cent of new cars sold in Australia in 2013 were purchased using a novated lease1.

While it almost sounds too good to be legal, novated leasing is ATO-approved, because the use of a vehicle falls under fringe benefits tax2. As such, you can get a new or used car for a substantial amount less than paying for it outright, in most cases.

The fine print

There are a few requirements and restrictions with novated leasing.

You must be employed to salary package a car, and you will need to budget your paycheck wisely. When leasing second-hand cars, you cannot put a vehicle on a novated lease if it will be around eight years old at the end of the lease, so that classic car you have your eye on will probably be exempt3.

Finally, if you quit or lose your job, you'll also forfeit the salary packaging benefits, and the lease will usually switch to a personal loan.

How will you buy your next second-hand car?How will you pay for your next second-hand car?

What's in it for the employer?

Your employer also has to be on board, though there are reasons why they might find it useful, too. By lowering their payroll tax commitments, they will spend less in subsequent payroll tax for each employee who uses a novated lease.

Each state and territory has different payroll tax thresholds and reduction rates, but according to Alliance Leasing, businesses can save up to $10,000 per year by having 20 salary packaged employees with average-priced cars2

How popular is novated leasing?

With all these pros and cons being said, there's a reason why people and companies up and down Australia are using the car leasing method. According to news site SBS, approximately 21 per cent of new cars sold in Australia in 2013 were purchased using a novated lease2.

It also appears to support local manufacturing, with some 82,000 cars (or 35 per cent of all cars sold in that year) being from Australian brands1.

Whether you're looking at a novated lease or a simple cash transaction to buy your next used car, just make sure you're not purchasing a lemon. A CarHistory report is a quick way to check on your new purchase, helping you avoid a costly mistake. All you need is your VIN number to get started.

1SBS, Novated leases under the microscope. Accessed June, 2016.
2Alliance Leasing, Employer's Guide to Saving on Payroll Tax Costs. Accessed June, 2016
3Fleet Network, Novated Leasing in Australia. Accessed June, 2016.

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