Comparison powered by Novated Lease Australia
Pay for your car and running costs through your salary
Upfront GST saving on car purchase (up to $6,191)
Can be used for a new or used car
Expert advice on your application and approval
Having bad credit does not rule you out from being able to get a novated lease.
Yes, the lender providing the finance for the novated lease will carry out a credit check when assessing your application.
However, even if the credit check shows a low score, it does not necessarily mean you will have issues being approved for a novated lease. Lenders also look at what is causing the low credit score and how it has changed over time.
The main impact of having bad credit will be on the interest rate you’re charged on the novated lease.
In that sense a novated lease is very similar to a car loan.
If you have bad credit you can expect to pay a higher interest rate on your novated lease.
If you have more serious issues on your credit history, like unpaid defaults or if you’re subject to a court enforced debt agreement, it’s unlikely you’ll be eligible for a novated lease.
A credit check is just one part of how your application for a novated lease will be assessed.
These are the other factors the lender is likely to consider:
There are no guarantees when applying for finance if you have issues in your credit history.
But here are some steps you can take to give yourself the best chance possible of being approved for a novated lease:
I’ve talked about how a novated lease can be a less risky form of finance for lenders.
But that doesn’t mean it’s without risk for the borrower. Particularly if you have bad credit.
For example, if you are charged a very high interest rate, some of the tax savings you’ll make by bundling your car running costs into the lease will be undone (although you'll likely still be saving money compared to other options for paying for a car).
You should also think about what would happen if you lose your job.
After all, you’ll still be responsible for the novated lease payments, without the tax savings you enjoyed through your employer.
Would you still be able to cover the repayments — for example, using your savings — until you find a new job? Even then, remember your new employer may not offer novated leasing as a benefit.
In a word, no. Like any other finance agreement, the provider will do checks to make sure the borrower is able to afford the repayments. A credit check is almost always part of that as it gives a strong indication of how well the person has been able to repay credit in the past.
The novated lease company you apply through should be able to advise you on your likelihood of approval, making a declined application unlikely.
Novated lease pricing on popular cars (including running costs)
Novated lease guides and resources
Find out more about the possible savings, benefits and things to watch out for, plus your range of options with a novated lease in Australia.