What Happens When Your Novated Lease Ends? Your Three Simple Options

Your novated lease is coming to an end, and you're probably wondering what comes next. The good news? You've got flexibility. Unlike traditional car finance that simply ends, a novated lease gives you genuine choice about what to do with your vehicle.

Here's a straightforward guide to your three main options and how to decide which one makes sense for you.

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Understanding Where You Stand

When your novated lease term finishes, there's a final amount owing called the residual value (sometimes called a balloon payment). This is set by ATO guidelines at the start of your lease based on the term length. At this point, you have three clear paths forward.

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Option 1: Upgrade to a New Vehicle

Ready for something new? This is one of the most popular choices.

How it works: Your current vehicle gets traded in or sold, and you start a fresh novated lease with a new car.

Why people choose this:

• You want to keep benefiting from pre-tax payments and GST savings
• You've enjoyed the convenience of having running costs bundled into your lease
• You want the latest technology, safety features, or an upgrade to an EV
• You're ready for a change and want a new vehicle experience

What to consider: This means committing to another lease term, so make sure your employment situation is stable and a novated lease still suits your circumstances. It's also worth checking whether your needs have changed - maybe you need a bigger car now, or perhaps you're interested in going electric. At Simplygreen, we'll help you sell your current vehicle and get you set up with a new lease so you can keep enjoying those tax savings without the hassle. You stay in control while we handle the details.

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Option 2: Extend Your Current Lease

Still love your car? You can keep it and keep the benefits going.

How it works: We can refinance the residual value and extend your lease for a new term. You keep driving the same car with the same novated lease structure you're familiar with.

Why people choose this:

• The car is reliable, you're happy with it, and it still meets your needs
• You want to continue benefiting from pre-tax payments and bundled running costs
• Extending is cost-effective since you're keeping a car you already know and trust
• You're not ready to upgrade yet

What to consider: Your car will be older, so think about whether it still has the features you need and how long you realistically want to keep driving it. Extending works really well when you've got a dependable vehicle that's still in good condition.

This option gives you simplicity - you keep everything as it is, just with a refreshed lease term.

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Option 3: Buy Your Car Outright

Prefer to own the vehicle and move on from leasing?

How it works: You pay out the residual value and the car becomes fully yours. While this means the novated lease benefits come to an end, it could suit you if leasing no longer fits your needs.

Why people choose this:

• Your circumstances have changed and leasing no longer suits you
• You want to own the car outright without any ongoing lease commitments

What to consider: Once you pay out the residual, you'll need to arrange your own insurance, registration, and maintenance going forward. You also lose the tax benefits that come with novated leasing. But if ownership matters to you or your situation has changed, this can be the right move.

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Which Option is Right for You?

There's no universally "best" choice - it depends on your circumstances:

Choose Option 1 (upgrade) if:

• You're excited about a new vehicle
• You want the latest features or are interested in switching to an EV
• Your current car is getting older or no longer suits your needs
• You're happy to continue with the novated lease structure

Choose Option 2 (extend) if:

• You want to continue enjoying the tax benefits with minimal hassle
• You love your current car and it's still reliable
• You want to keep things simple and maintain the status quo
• The car meets your needs and you're not interested in upgrading yet

Choose Option 3 (buy outright) if:

• You want full ownership without ongoing lease commitments
• Leasing no longer fits your circumstances
• You're ready to move on from salary packaging

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What Happens Next?

The best time to start thinking about your options is around 6 months before your lease ends. This gives you time to:

• Review your current situation and what you need from a vehicle
• Get valuations if you're considering trading in
• Explore new vehicle options if you're thinking of upgrading
• Understand your residual value and plan accordingly

Simplygreen (your novated lease provider) will reach out to you well before your lease ends to discuss these options. We will provide specific numbers for each scenario and help you work through what makes most sense.

If you're leaning toward upgrading, we can show you what's available and prepare quotes. If you're thinking about extending, we can give you figures for refinancing your current vehicle.

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Making Your Decision

Start by asking yourself:

• Am I still happy with my current vehicle?
• Has my situation changed since I started the lease?
• Do I want to continue with novated leasing benefits?
• What would suit my needs best right now?

Your dedicated Novated Lease Consultant will walk you through the numbers for each option based on your specific situation, so you can make an informed decision without pressure.

The end of your lease isn't something to stress about — it's an opportunity to reassess what works for you and choose the path that fits your current circumstances.