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Frequently Asked Questions

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  • Novated Lease
What is a novated lease?
A novated lease is a lot sexier than the name sounds. It’s the cheapest way to own and run a car. Why? Because you get to pay for a majority of your car and all its running costs using pre-tax salary. Because it’s the cheapest way to own a car, the ATO doesn’t make it easy, that’s why we built Lendly Pay, because novated leasing shouldn’t just be for employees who work for big companies.
  • Novated Lease
How does Lendly Pay work?

It’s not just the cheapest way to own a car, but also the easiest;

  1. Choose any car; new, used or even the one you already own;
  2. Lendly budgets for all the costs of running the car; fuel, tyres, servicing, registration, insurance, finance, roadside assistance and even car washes;
  3. Your employer deposits money into your Lendly Pay Wallet for you to spend on these costs, a majority of that money comes from pre-tax salary;

There are heaps of other savings and benefits along the way. Once you have a novated lease on Lendly Pay you’ll never own your car another way again.

  • Novated Lease
What does Lendly Pay include?

All the costs you are already spending on running your car right now;

  • Fuel
  • Finance
  • Tyres
  • Comprehensive insurance
  • Registration & CTP
  • Roadside assistance
  • Servicing and repairs
  • Even car washes!

Sorry, it doesn’t include speeding tickets, parking fines and tolls, those are on you.

  • Novated Lease
Do I own the car at the end?

Nope, and you don’t want to. While the car is on a novated lease you get tax benefits on all of the running costs and finance…Which means if it’s not on a novated lease you pay for all of those things with after-tax money.

That’s like paying off an investment property before your own house. You just wouldn’t do it.

At the end of the lease term if you really, really want to park your hard earned, after-tax money into a depreciating otherwise deductible asset, then sure go for it. But we know that once you’ve experienced the savings and convenience with Lendly Pay, you won’t own your car any other way again.

  • Novated Lease
What is a residual value?

It’s the amount of money owing on the car at the end of a lease term (you might know them better as balloons). Novated leasing is already the cheapest way to own a car, so the ATO needs to cap that tax benefit somehow. They do this by limiting the amount you can pay off the car over a certain period of time. Residual values follow an ATO depreciation curve and are based on the lease term;

1 year = 65.63%
2 year = 56.25%
3 year = 46.88%
4 year = 37.5%
5 year = 28.13%

Residuals aren’t something to be scared of, with industry leading data and expert car advice, our Success Team will make sure you are on the right side of that depreciation curve. The side that sees you get a tax-free profit at the end of your lease.

  • Novated Lease
Can the residual value ever change?

The ATO understands that some people drive a lot more KMs than others and in turn, their cars depreciate a lot faster. For those drivers that do more than 30,000km a year, they give you the option to pay off a little more of the car by having a lower residual, these “high-km residuals” are;

1 year = 50%
2 year = 40%
3 year = 30%
4 year = 20%
5 year = 15%

  • Novated Lease
Can I package more than one car?

Yes, you can put as many cars on Lendly Pay as you like, as long as you can afford it.

  • Novated Lease
Can I package any car I like?

Yes, even a second hand car or the one you already own, providing it’s worth more than $10,000 and no more than 12 years old at the end of the lease term.

  • Novated Lease
Can I package a car that I already own?

Yes, it’s called a sale and lease back. The finance company buys it off of you at market value (leaving you to put the money to work on your mortgage or in a savings account) and you lease it back using pre-tax dollars!

  • Novated Lease
Can I source the car myself?

Yes, of course you can. If you’re one of those people that love to spend their Saturdays going dealership to dealership haggling your way to the lowest possible price, go for it. If you’re like the majority of people and couldn’t imagine anything worse, then we can get that result and likely better with one click of a button.

  • Novated Lease
Can you get a cheaper price on a new car than I can?

We buy a lot of cars, which means we get great pricing, all year round!

If you want to spend 3 weekends negotiating your way through 5 different dealerships, you are likely to eventually get the price that we can get. However, we get you this price without setting foot in a car dealership, in fact, once we buy the car, they will even bring it to you.

  • Novated Lease
What happens at the end of the lease?

Just like at the start of your lease, our Success Team are here to guide you. Most of our drivers sell their car (or we sell it for them) and replace it with another car on Lendly Pay. Because of the car advice up front a majority of them get a nice tax-free profit on the way through.

Some drivers still love their cars, that doesn’t mean they have to give up the tax benefits just because the original lease term is over. We can extend the lease and keep paying for the car and it’s running costs pre-tax.

If you really want to payout the residual and keep the car without any tax benefits, you can do that too.

  • Novated Lease
I work for a small company, can I still use Lendly Pay?

Yes, in fact, it’s why we exist. Whether your employer has 5 employees or 500, we’re here to help give everyone in Australia access to the tax benefits employees of large corporates have been getting for years.

  • Novated Lease
Do I have to use the car for work?

No, Lendly Pay is the only way you can get a tax benefit on a car that you use for 100% personal use. But if you do use your car for work, we can get you even bigger tax benefits than what you might be getting now.

  • Novated Lease
Does it matter how many kilometres I drive?

No. It’s been almost a decade since kilometres impacted your tax savings on a novated lease.

  • Novated Lease
Is novated leasing just for people on the top tax bracket?

No, if you pay any income tax at all and you have a car, you can save.

  • Novated Lease
Do I save GST on running costs?

Yes, you do. Because your employer is registered for GST and they are paying for your car costs before recovering it from your pay, they claim a big chunk of the GST on the way through, passing that savings directly onto you. That’s a 10% savings on almost all of your cars running costs.

  • Novated Lease
Do I save GST on the purchase price of the car?

Yes, if you buy a car from a dealership you save the GST. On Lendly Pay, the finance company buys the car and leases it to you, this is what allows you to get all the tax savings compared to say a normal car loan. Because the finance company is a business that is registered for GST, they claim back all the GST on the invoice (up to the luxury limit) and you finance the ex-GST amount. Saving you thousands of dollars on day one.

  • Novated Lease
Can I just include the finance payments without running costs?

Is it possible, Yes. Will we let you do it, No.

We didn’t build Lendly Pay so people could access just a little bit of the tax savings. We want every driver to get all the tax savings that the ATO allows. If you’re planning on filling up the fuel tank, servicing the car and making sure it’s insured, then you want to pay those costs using pre-tax salary.

  • Car Management
Can I fill up at any petrol station?

Your Lendly Pay card only works at Caltex, but if you get stuck, we also give you a Shell card. Don’t forget, when you use your Lendly Pay card you receive 10c per litre back for the first 6 months of your lease. If you’ve successfully referred a friend or colleague to Lendly Pay you’ll receive 10c per litre back for the entire life of your lease.

If you have to fill up somewhere your fuel cards aren’t accepted, it’s all good, we’ll reimburse you via the driver portal.

  • Car Management
I need to take the car for the service, what do I do?

Your Lendly Pay card connects you to thousands of service centres across Australia. When you book it in just ask them to bill the service to Starfleet. There is nothing for you to pay, they just bill the service back to your Lendly Wallet. They also make sure the service centre doesn’t throw in any additional costs that you don’t need.

  • Car Management
Does Lendly renew my registration?

No, that one gets sent directly to you by your state transport authority, so you will need to renew it and then ask for reimbursement through the driver portal.

  • Car Management
What happens if I do more or less kilometres?

Not a problem, we do our best to understand your usage up front but it’s just a budget and you only pay for what you spend. If at any time your driving patterns change, our Success Team are here to help make the appropriate adjustments to your budgets.

  • Car Management
What happens if I overspend on my budgets?

Lendly Pay works like a debit card, if there is money in the account then we’re good to go. However, if there are expenses to paid for and no money in your Lendly Wallet then we just need to increase your budgets to compensate.

We’ll ask your payroll to take some additional money out of your pre-tax salary to top it up. This makes sure you don’t miss out on tax benefits on any of your running costs.

  • Car Management
What happens if there is money left in my Lendly Wallet?

No problem, when you get to the end of your lease term if there’s any money left over, you get it back. We just send it back to your employer who will reconcile the lease back through payroll.

  • Car Management
Can I exit the lease early?

Sure you can and there is no cost to leave Lendly Pay. We know things can change Just let us know and we’ll close down the program within 5 business days.
We wouldn’t recommend exiting the lease early on unless absolutely necessary. A lease is set over a fixed period of time, if you want to exit early there is a chance that the amount you owe to the finance company is greater than the value of the car, the highest risk of this is in the first half of your lease.

  • Car Management
What happens if I change jobs?

Easy, we can just move your Lendly Pay program to your new employer. All you have to do is put us in touch with HR or finance and we’ll take it from there. We’ll have to close the existing digital wallet that’s tied to your previous employer and open a new one with your new employer.

  • For Employers
What is FBT?

Fringe Benefits Tax. When an employer gives staff non-cash benefits instead of salary, the ATO, not one to miss out on their fair share, charges the employer FBT on these “fringe benefits”. Common fringe benefits are things like; company cars, car parking and novated leasing. Not to worry though, unlike the other fringe benefits novated leases can be setup without the risk of any FBT liability.

  • For Employers
Do we have to pay FBT?

No, on Lendly Pay none of our employers pay FBT.

We setup all of our leases using the employee contribution method, which eliminates any FBT liability.

  • For Employers
What is the employee contribution method (ECM)?

The Employee Contribution Method (ECM) allows an employee to eliminate an FBT liability by making post-tax contributions towards their car and its running costs. All cars on Lendly Pay are setup using this method.

  • For Employers
What happens if the employee leaves?

The lease is in their name not yours. If the employee leaves, the novation ends and the lease goes with them, there’s no car left sitting in the car park costing you money.

  • For Employers
Does novated leasing cost the employer anything?

No, all the costs are fully recovered from the employees’ salary.

Ready to get started? Contact us today for a free quote!