What happens at the end of a novated lease?

4:20 minute read

Published on August 1, 2025

Thinking of taking out a novated lease? You may be wondering what happens at the end of your lease… do you pay the residual to keep the car? Hand it back? What happens if you come in under budget on your running costs?

The good news is the end of a novated lease isn’t a dead end. It’s a fork in the road, and you’re in control of which route you take. And with Oly, you get end of lease support (as well as throughout your lease), so you’re always in control.

What happens at the end of a novated lease?

Key takeaways

Curious what happens when a lease wraps up? You can upgrade to a new car, extend your current lease, pay the residual to own your car outright, or trade it in, and maybe even pocket some extra cash.
Have excess funds in your running cost account come end-of-lease? If there’s cash left over, you can have it refunded (as taxable income), roll it into a new lease, or put it towards your residual payment after receiving it from your payroll to own your car outright.
Oly takes you through your end-of-lease options nice and early, so you have all the info you need to make the best next move (and avoid the last-minute scramble).

So, what are your end of novated lease options?

When your lease is almost up (typically after one to five years), you’ve got 3 to 4 options to pick from:

1. Fresh lease, fresh wheels

If you’re keen to upgrade to something newer, bigger or faster (or all 3!), just trade in your current car, square up anything owing, and apply for a fresh lease with a brand-new ride to keep benefiting from those saving opportunities!

Oly can even help you source a great deal on your next car, set up your new lease, and wrap up the old one. This includes sorting the trade-in, putting the proceeds toward your residual, and if there’s any extra cash from the sale, Oly will pop it into your nominated bank account.

2. Extend your current lease

Want to keep the convenience (and before-tax perks) of your existing lease rolling? Easy. You can extend your current lease - and possibly even with lower payments. Plus, the longer your lease runs, the smaller your residual tends to be, which could mean more dollars in your pocket. As the saying goes… if it ain’t broke, keep on rollin’!

3. Square up and own your car outright

Head over wheels for your current ride? You could own your car outright by paying the residual (or “balloon”) amount in your lease contract. The amount depends on your lease length and the car’s value at the end.

4. Trade your car in

Jetting off to the moon or relocating to some roadless island? If you no longer want or need your car, you have the option to trade it in and walk away. And if it sells for more than your residual, you could pocket the difference for a hammock fund. If it sells for less? You’ll need to cover the shortfall.

Just a heads-up: the residual needs to be paid with post-tax dollars, so you can’t use funds from your novated lease account to cover it.

Keen to end your lease early?

A novated lease is designed to run for a set period - so if you need to exit early, you could end up owing more than the market value of the car (plus some added fees from the finance side).

That’s why it’s smart to set up your lease for as long as you think you’ll want the car. This helps reduce any early-exit costs.

What happens to excess funds at the end of a novated lease?

Been a good bean and budgeted more than you needed for running costs? If your lease is with Oly, your account will be settled in 60 days. And if you have leftover funds, you have a few options, depending on what you decide to do next with your lease. You could have the excess funds:

Do you own the car at the end of a novated lease?

You don’t automatically own your car at the end of your lease, unless you choose this path and square up the residual amount owing.

When should you start thinking about your end-of-lease plan?

The Oly team will reach out to you roughly 6 months before your lease comes to an end. This gives you time to:

Which is the right end-of-lease option for you?

This one’s a little tricky. You want to weigh up how much you love (or maybe don’t love) your car, plus your budget, lifestyle and financial goals.

Whether you plan to buy your car outright, upgrade, trade in or move on, knowing your options puts you firmly in the driver’s seat. With an Oly novated lease, you won’t be riding solo - the Oly team will be right beside you to answer any questions so that you can make the best next move.

What makes Oly novated leases legendary?

Oly will work with you and your employer to help get your novated lease set up. From sign up and setting up your automatic salary deductions to end-of-year reporting, you’ll have everything in place to get the most out of your pay.

And thanks to Oly’s handy app, you can submit claims, check your budget and make changes to your account anywhere, any time - awesome!

Oly is backed by one of Australia’s largest and most trusted novated leasing providers, MMS. That means bigger Aussie-backed buying power to get a great deal on your next car - and with less head-scratching over the admin too.

Get a quote with Oly today.

Ready to drive?

You don’t need to work for a big company to get big benefits, but to be eligible for an Oly novated lease you do need to be:

- Employed full-time, part-time or self-employed

- Earning a set salary (AKA not unemployed, retired, or a ride share driver)

- Looking for a car for personal use

Fill out this form to kick things off, then check your inbox for a link to create your Oly login to apply online (hint: check your spam/junk folder).

Things you need to know

This general information doesn’t take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax and financial advice. Conditions and fees apply, along with credit assessment criteria for lease products. The availability of benefits is subject to your employer’s approval. Oly may pay and/or receive commissions in connection with its services. Actual vehicle prices are based on specific vehicle and accessories, prices and savings may vary based on additional options selected with vehicle. Oly does not act as your agent or representative in respect of the purchase of any vehicle. Oly does not provide any advice or recommendations in relation to the purchase or lease of any vehicle.
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