We’ve all heard those horror stories about bosses who sound like they should have pointy tails and horns and be walking around with pitchforks, smelling of brimstone. I could tell you the story about a boss who threw a wobbly when an employee phoned in to say he might not be coming in to work the next day because his wife had just gone into labour that night (“But it’s not your day off! You can’t do that!”). Or the one about the boss who didn’t like people making plans on their days off just in case she needed her staff to come in at short notice. Or the one who… Well, you get the idea. You can find plenty of examples online. But if that sort of thing happens to you and you have a novated lease as part of your salary package, what will happen if you leave your job?
Now, we don’t blame you for wanting to get out of a toxic job where you face unrealistic expectations, harassment or other horrible things that employers can inflict on employees. However, one of the reasons why employers set up novated leases is to ensure employees’ loyalty. In the case of a happy, healthy workplace, this is fine, and it’s reassuring to know that the company values you enough and wants to stick with you. But with a bad boss, it’s another story. That novated lease may feel more like a chain around your ankle rather than a benefit, even if you’ve enjoyed the benefits of driving a new car that you haven’t had to make the repayments for. It’s obvious that you have to leave that bad job for the sake of your sanity and possibly for the sake of your family.
The good news is that it is possible to leave your job even though you have a novated lease set up. However, you can’t just walk away from the novated lease as easily as you can walk away from a toxic workplace. Even so, you have options for how you can handle this.
#1: Your New Employer Takes Over Your Novated Lease
This is the best solution out there. In a number of cases, you can see if your new employer will take over your existing novated lease as part of your new salary. If you have been able to snag a new job before you walk out of Inferno Incorporated and slam the door behind you, then it’s all smooth sailing, and the responsibility for making those lease payments passes to the new company. And you get to keep driving the car that was part of the lease.
#2: You Take Over The Lease Payments
Of course, you may not be able to organise a new job before you walk away from your old one, especially if something drastic happens that means you need to leave quickly (the boss who insists on you working in hazardous conditions or who has moved on from verbal sexual harassment to groping, for example). In this case, you will have to take care of the lease payments yourself after you leave, just like you would if you had got a car loan. You may have to dip into your savings to make these payments while you’re job hunting, and if your new employer doesn’t do the novated lease thing, then you’ll still have to handle these payments yourself.
#3: You Pay For Early Termination Of The Novated Lease
The third option is to go for early termination and pay the residual value of the car outright. Read the small print before trying this one, as you may also have to pay a termination fee. It can also be quite expensive, depending on what the residual value is. However, the upside is that the whole thing is done and dusted – and you have the option to sell the car afterwards, especially if it brings back bad memories of a horrible workplace.
The really important thing to do in all these situations is to talk to your financing team (you know, like the nice folk here at FinCar). We will help you work out which of the options will work best for you. After all, if you’re already facing some stress that’s causing you to quit your job, the last thing you need is extra hassle.
One more note: if you have doubts about your job and your employer offers you a novated lease, don’t take it. Although setting up novates leases is our job, and we’re happy to tell you about all the advantages, we also don’t want people being tied to a toxic workplace.
However, if you’re happy with your workplace and you have no intention of leaving it, then a novated lease might be just the thing. Have a chat with us about it today!