Key Takeaways
• Cars that are too old or in poor condition
• Unroadworthy, unsafe, or heavily modified vehicles
• Imported vehicles that may not meet Australian compliance/licensing requirements
• Vehicles intended for commercial/industrial purposes rather than personal passenger use
• Motorcycles, and similar non-car vehicle types per ATO classification rules.
While novated leasing offers plenty of flexibility, there are some clear rules around what cars can’t be leased. Primarily, it comes down to the factors of depreciation, and legal definitions.
The main types of ineligible vehicles:
- Very old vehicles
Most lease providers won't be able to novate a very old car for you, typically, they'll say no to cars that will be over 10 years old at the end of the lease. At Clear Lease, we're a little more flexible - but we typically won’t approve cars older than 12 years at the end of the lease term. So if you're leasing for 5 years, the car generally can’t be more than 7 years old at the start.
The occasional exception can be made for prestigious older cars, like rare models, as these cars can hold their value much longer and might make the depreciation cut.
This reason for old vehicles being a grey area is because they can be difficult to finance and insure, and difficult to figure out an accurate residual value. Older cars can also bring a lot of uncertainty in estimated repairs and maintenance, which makes figuring out a predictable payment in your novated lease, and avoiding any unexpected, unaccounted for large bills very hard.
- Vehicles over a certain mileage
High-kilometre vehicles (e.g. over 150,000 km) are often excluded due to depreciation and reliability concerns. We'll need to evaluate high kilometre cars case by case to see if they could be eligible.
- Unregistered or unroadworthy vehicles
The car must be roadworthy and registered for use on Australian roads, no repairable write-offs or paddock bashers.
- Privately imported vehicles
Most lease providers won’t approve grey imports or vehicles that haven’t gone through standard compliance checks in Australia. Clear Lease may be able to help you navigate this if you have your heart set on one. Contact us to discuss.
- Commercial or modified vehicles
Cars that have been heavily modified, or those intended for heavy commercial use (like large trucks, tool-of-trade vehicles, or construction machinery), are usually off-limits.
- Motorcycles
Novated leasing is typically restricted to cars. Motorcycles are not eligible for novated leasing under current ATO guidelines.
What About Used Cars? Can I lease them?
Yes, but only within age, and condition limits. At Clear Lease, we generally accept used cars that will be less than 12 years old by the end of the lease term, although there are some exceptions with older prestige, or low depreciation models.
You can find out more about Used Car Novated Leasing here.
Always check with us if you are unsure
Eligibility does have a couple of grey areas, so it’s always worth confirming the criteria with Clear Lease before purchasing or committing to a vehicle.
Written by Nicolas Jarvisto
Founder and Director
Nicolas Jarvisto is the Founder and Director of Clear Lease, with over 19 years of experience in the finance and novated leasing industries. Nicolas utilises his strong background to provide clear, practical advice on novated leasing and salary packaging to make car leasing simple and accessible for everyday Australians.
