A novated Lease is an agreement between the employer, the employee and the financier of the vehicle, whereby the employer typically agrees to meet finance lease payments and vehicle running costs while the employee remains employed.

In return, the employee 'sacrifices' a portion of their salary to cover the cost of the finance. If the employee ceases employment with that employer, they retain the vehicle, but then become responsible for all future leasing and operating costs. A replacement Novation agreement may be established with a new employer.

Under these arrangements, certain benefits arise for both the employee and the employer.

By selecting a Novated Lease, the employee can chose the car of their choice whilst the employer removes the burden of listing the vehicle in its books and having to dispose of it should the employee leave.