Packaged Vehicle Program Corporate Summary - a Fully Maintained Novated Lease


Welcome to the Packaged Vehicle Program. This program is a fully maintained Novated lease that represents a tax effective way of leasing a vehicle through your salary package. By rolling all vehicle associated costs into a fixed monthly payment we make salary packaging simple and hassle-free.

What can be included? Why do your Employees want a Novated Lease? Why do Employers Offer Novated Leases? For further information, please contact us on 1300freespirit

What is a Novated Lease?
A Novated lease is a three-way arrangement between you, your Employee and a Financier. A finance lease is set up between your Employee and a Financier while a Novation agreement is created between the three parties.

What is the Packaged Vehicle Program (PVP)?
The Packaged Vehicle Program (PVP) maximises the benefits of a Novated lease by including, not only the finance payments but also the costs associated with the vehicle into one fixed monthly payment. Significant tax benefits are achieved this way as a proportion of this payment is deducted from the Employee’s pre-tax income.

Typically this fixed monthly payment can include:

Due to changes in the current income tax thresholds an increasing number of people are paying too much Fringe Benefits Tax (FBT). By customizing a solution specifically for each Employee’s needs and using Australian Taxation Office approved methods, we can reduce the FBT you pay.

What are the benefits to Employees?

What type of vehicles can be placed on a Novated Lease?
Employees can lease new and used motor vehicles. However used vehicles must be less than 8 years old at the end of the lease term and the projected odometer reading at the end of the lease must be no more than 200,000 kilometres.
The minimum amount that can be financed is $10,000.

Can Employees Novate more than one vehicle?
Yes. There is no limit to the number of vehicles that Employees can novate. As long as their salary package can support it, they can also choose to package an extra vehicle for their spouse or child. Please contact your Consultant on 1300freespirit for further information.

What term can be set for a Novated lease?
A Novated lease can be arranged for terms of between 12 and 60 months, in six month increments.

What residual values are used?
A residual value is the amount left owing at the end of the lease term. It can also be known as a “balloon payment”. The Australian Taxation Office has set minimum residual values and these are set out in the table below.

Lease Term

Minimum Residual

12 months


24 months


36 months


48 months


60 months


How does an Employee arrange a PVP?
Step 1: Have them call us on 1300freespirit to speak with a Consultant. They will be provided with a PVP estimate that outlines the tax benefits available to them and how it will affect their take home pay.

Step 2: We will speak to you as their Employer to explain the process involved and assist with finalizing the Corporate Authorisation Kit.

Step 3: We will negotiate with car dealers to secure the best price for your Employee’s new vehicle. We can even help trade in their old vehicle.

Step 4: We will help your Employee complete their credit application over the phone and once they’re approved, a delivery date will be set.

Step 5: They can pick up their vehicle!

What documents need to be signed?
  1. The employee will be sent a Quote Requisition Form for them to sign together with the Authorized Signatory of the employer. This document authorizes the Employee to apply for finance and should be faxed back.
  2. Once the Employee has been approved for finance, they will be sent the lease documents to sign and fax back prior to picking up the vehicle. There is no need for the Authorized Signatory to sign this form.
  3. After the vehicle has been picked up, the Novation documents will be sent to the Authorized Signatory to sign and fax back. This document confirms that the payments for the vehicle will be salary packaged.
  4. A Human Resources Advice will be issued by freespirit within five business days of the vehicle being picked up. This document details the amounts to be deducted from the Employee’s payroll before and after tax as well as the GST input tax credit available to the Employer.
  5. It is important to note that because payments are made in advance, it will be necessary to deduct two months’ worth of payments in the first month.
  6. A tax invoice for the Setup Fee will be issued together with the Human Resources Advice.

PVP Reporting

Quarterly driver report

Employees will receive quarterly driver reports that include statements detailing their itemized transactions, such as fuel and a summary of their lease payments to date. A comparison of budgeted and actual vehicle operating costs will help them track their expenses. If their budgets are in substantial deficit, please advise them to contact a Consultant on 1300freespirit

Corporate FBT Summary Report

We will provide you with regular Corporate FBT Summary Reports. These are derived from the information provided by your Employees when they complete their individual FBT Tracking Reports.

The Corporate FBT Summary Report will identify who is on course to meet their kilometre targets by the end of the FBT year on 31 March and who is not. Periodically employees who have not yet completed their individual FBT Tracking Report, are requested to provide the required information.

If you believe that an Employee will not meet their kilometre target, please advise them to contact a Consultant on 1300freespirit

Transferring or Ending the PVP

What happens at the end of the lease?
A Consultant will contact the Employee before their lease ends. The options available to them include: What happens if an Employee leaves during the lease term?
The Novation agreement will need to be terminated if they leave. They can then either transfer their Novated lease to their new Employer or continue to make finance repayments directly to the financier until the end of their lease term.

It is their responsibility to ensure that their vehicle remains comprehensively insured. Please advise them to call their Consultant on 1300freespirit to discuss the options available to them as soon as they are thinking about leaving.

They will then need to fax a completed Termination of Novation Agreement form and a reconciliation will be carried out.

What is involved with the reconciliation?
The reconciliation will compare the amounts that have been set aside as budgets versus the amounts they have actually spent. If there is a surplus this will be refunded to you, in order to withhold any tax and superannuation payable and then pass on only the net amount to the Employee.

However, if there is a deficit, then the difference will be invoiced to you. The payment of the deficit will be made through you as the Employer in order to maximize the Employee’s tax benefits. You should withhold their final pay until the reconciliation is completed and any deficit has been paid.

What if the Employee’s budgets don't cover their actual running costs?
All running costs are paid for using the budgets set aside from the monthly payments you deduct from their salary. At the beginning of the lease, the budgets are set using estimates of what the running costs are likely to be. The Employees will receive quarterly reports which detail the actual costs incurred versus the budgets. This allows them to ensure that their budgets are covering their actual running costs.

If they do not match simply advise them to call 1300freespirit and talk to their Consultant. It is important to be realistic when setting budgets at the beginning of the lease, as a $220 Recalculation Fee will apply to cover the administration costs of any recalculations.

Unlock the capital invested in your fleet by selling & leasing back

How does it work?

Benefits to Your business

Want to find out more? Call 1300freespirit or email

Frequently Asked Questions

What fees are involved?
The monthly payments include all regular management and administration charges. There is a once off Setup Fee of $550 including GST which can be reduced to just $220 as part of our referral program. Furthermore, because it is invoiced to you as the Employer and deducted tax effectively, this fee can end up costing less than $110 from the Employee’s take-home pay.

How will my Lease payments be made?
Tax invoices will be issued at the beginning of each month for all vehicles, with payments direct debited from the bank account you nominate in advance on the 20th of each month or the nearest business day thereafter. All payments will be for whole months and are not subject to pro rata treatment.

Please note that it is necessary to deduct two payments from the Employee’s payroll in the first month after delivery, to be up to date with the "monthly in advance" payment terms. Only one payment per month will be deducted from then on. Be assured that if an Employee is on a 36 month lease for example, they will only ever make 36 payments over the term of their lease. If they leave, the Novation Agreement is terminated and reverts to a normal Finance Lease between the Employee and the Financier. The repayments will then be direct debited from the Employee’s bank account on the 20th of each month or the nearest business day thereafter.

What if we appoint a new Payroll, Accounts, or HR contact, move office, change our phone number or get a new email address?
Please notify us as soon as possible as we use these details to contact you regularly as part of the program and for specific matters that may arise from time to time.

Can there be more than one Authorised Signatory? What happens if an Authorised Signatory leaves?
You can have as many Authorised Signatories set up to approve Novated leases as you would like. This can be useful when one Authorised Signatory is away, then Employees will still be able to set up a Novated lease in a timely manner.

Should Employees obtain their own independent advice?
It is important to note that a Novated lease may not suit everyone’s circumstances. Employees should consult with their accountant or tax professional before committing to a Novated lease to ensure this is right for them.

Can a second hand vehicle be leased?
Yes, provided it is not more than 8 years old.

Can privately owned vehicles be leased?
Yes, they are sold to the finance company and leased back to you under their novated lease agreement

Can cars under an existing lease be novated?
Yes, they can either be refinanced with the asset sold to a new finance company that provides a novated lease to you or a novated lease can be overlaid on top of the existing lease.

How many vehicles can an employee lease?
This is subject to the employer's guidelines, but the number is unlimited.

How long is a lease contract?
Between 18 and 60 months. Most commonly 48 months (4 years).

Who is responsible for any loss in disposal of a car under a novated lease agreement?
The employee.

Who will prepare all the documentation and facilitate the completion of the lease agreement and the implementation of salary packaging?
We will take care of that for you.

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