Self-managed novated lease
A novated lease where you arrange the finance and your employer's salary packaging administrator carries on managing the deductions exactly as before. Only the loan on the car changes.
Self-managed, BYO, finance-only — all the same thing
Different providers use different words for one arrangement. If you have been told your provider does not offer one of these, it is worth asking again using another — a surprising amount of the time it is a vocabulary mismatch rather than a policy.
- Self-managed novated lease
- BYO finance
- Finance-only novated lease
- Employee-arranged finance
- Externally financed novated lease
Who decides whether you can have one
Your employer, through its salary packaging arrangement — not the administrator. This is the part most people have backwards, and it is why being told no by a consultant is not the end of the question.
The administrator
Runs your pre-tax deductions, running-cost budgets, card and FBT reporting. Your employer chose them, and on a self-managed lease none of this changes.
The employer
Sets the arrangement, and therefore decides whether an externally financed lease can be administered under it. Some arrangements say so expressly. Many say nothing about finance at all.
We publish what we have been able to establish for 127 Australian employers, including what each position is based on and when we last checked it.
Check your employer →What to ask for
The wording matters more than it should. A consultant working from a bundled quote may not recognise the request phrased any other way — “can I use my own bank” reads as a question about paying cash, where the terms below name a product they have a process for.
- “I'd like a self-managed novated lease.”
- “I'd like a BYO finance novated lease.”
- “I'd like a finance-only novated lease.”
- “I'd like an externally financed novated lease.”
What they will need from you
- Written finance approval
- From your financier, showing the lender, the amount financed, the term and the residual. This is the document the whole process hangs off.
- The novation deed
- The administrator issues it. It is signed by you, your employer and the financier, and it is what transfers the lease obligations to your employer while you are employed there.
- The dealer tax invoice
- Made out correctly to the financier, not to you. A wrong purchaser or GST treatment on this invoice is the most common cause of a delayed settlement.
- Proof of identity
- Usually a driver licence. Standard for any lease, novated or not.
- A payroll start date
- Your deductions normally begin in the first full pay cycle after settlement. Confirming the date in writing avoids a gap between the first lease payment and the first deduction.
Common questions
What is a self-managed novated lease?
A novated lease where you arrange the finance on the car yourself, rather than using the finance bundled into your salary packaging provider’s quote. Your employer’s salary packaging administrator continues to manage the payroll deductions, running-cost budgets and reporting exactly as before. Only the finance changes.
Is a self-managed novated lease the same as a BYO novated lease?
Yes. Self-managed, BYO (bring your own) finance, finance-only, employee-arranged and externally financed all describe the same arrangement: the employee sources the finance and the existing administrator handles the salary packaging. The words differ between providers, which is why asking for one and being told they do not offer it is often just a vocabulary mismatch.
Who decides whether I can have a self-managed novated lease?
Your employer, through its salary packaging arrangement — not the administrator. The administrator administers; the employer sets the policy. Some arrangements expressly allow an external financier, some expressly require a panel, and a great many say nothing at all about finance, in which case it is a question to put to your employer in writing.
Does my salary packaging change if I arrange my own finance?
No. Your existing administrator continues to run your pre-tax deductions, running-cost budgets, fuel or charging card and FBT reporting. Your payroll team does nothing differently. The only thing that changes is who provides the loan on the car.
Why would I arrange the finance myself?
The finance bundled into a novated quote usually carries a margin on top of the lender’s rate, and a bundled quote states a periodic payment rather than the interest rate inside it. Arranging the finance separately makes that rate visible and comparable. Whether it is cheaper in your case depends on the rate you are being offered, which is what a quote comparison shows.