4 min read
New vs used vehicles
Both can be novated — but terms, rates, and FBT treatment differ.
New vehicles
New cars attract the best interest rates and longest lease terms (up to 60 months). Full manufacturer warranty, latest safety features, and maximum GST saving on purchase price. Most popular choice for novated leases.
Used vehicles
Most providers finance used cars up to 5–7 years old. Interest rates may be 1–2% higher and maximum lease terms shorter. Same tax principles apply. Used EVs below the LCT threshold still qualify for FBT exemption if they meet eligibility criteria.
- Get a pre-purchase inspection for used vehicles
- Shorter lease terms mean higher residual percentages
- Used car market can offer better value near end of warranty periods
Key takeaways
- New cars: best rates, longest terms, full warranty
- Used cars: higher rates, shorter terms, still tax-effective
- EV FBT exemption applies to qualifying used EVs too
- Always compare total cost of ownership over the lease term
This content is for educational purposes only and does not constitute financial or tax advice. Verify details with the ATO, your employer, and your novated lease provider.