Guaranteed buy back insurance
What is it?
Once your lease period has ended, you'll need to make a final payment to the financier called a 'residual payment'. For most people, selling the car you've been leasing is the easiest way to make this payment (then you can start a new lease with a shiny new car!). But if the market value of the car is less than what you owe for the residual payment, you could end up out of pocket. That's where Guaranteed Buy Back Insurance (GBB) comes in. Your insurer buys the car at the end of the lease for the total residual payment amount, so you won't end up having to pay any extra (provided that your lease extends to the full term and the average km travelled is less than 30,000 per year).
Why it's worth having...
When you get to the end of your novated lease, your car's value might not be enough to cover your residual payment. If that happens, you'll have to make up the difference. GBB takes the worry away, guaranteeing you won't be left out of pocket when you're done with your leased car. This insurance includes:
- A one-time premium payment, with no excess
- Cover for the difference between what you can sell your car for and your end of lease residual payment (as long as your lease has gone full term and you've travelled less than 30,000km on average per year)
- Where you end the lease early, the Guaranteed Buyback Value (GBV) is calculated using the percentages set by the Australian Taxation Office, multiplied by the purchase price of the car
- Where you have travelled between an average of 30,001 and 50,000 kms per year, the GBV is reduced by a certain percentage as set out in the PDS
- You could get paid out to a maximum amount of $25,000
What's not included...
If the market value of your car is more than the amount the insurer agrees to pay for it (known as the Guaranteed Buyback Value, or 'GBV'), you'll still only get the GBV.
The policy won't be valid if you've travelled more than 50,000km per year on average during the lease, or if you sell the car to someone else.
The fine print
These examples are only provided as a summary and are not exhaustive. Please read the Product Disclosure Statement for all of the important product terms and conditions and other info that will be relevant for you.
For example
Jake leases a new car worth $35,000 with a five-year lease. After five years, at the end of the lease, he decides that he does not want to purchase the car and opts to trade in the car to cover the $10,830 residual payment to Oly. Unfortunately, the market value of the car is now $8,200, leaving Jake with a difference of $2,630 to pay.
Luckily, Jake has GBB (clever Jake), and because he’s kept his lease for the full five years and has travelled less than 30,000kms each year on average, his Guaranteed Buyback Value (GBV) amount is his residual value.
That means all Jake has to do is hand the car over to the insurer, who’ll pay the financier the total residual payment amount of $10,830. Jake doesn’t need to pay a cent.
Important documents
If you’re having trouble accessing any of these documents, get in touch and Oly will organise copies for you by another method.
For your reference Oly suggests hanging onto copies of these Product Disclosure Statements and Financial Services Guides with your lease documentation.
Product Disclosure Statements (PDSs)
Download and read the Product Disclosure Statements for all the details, terms and conditions of each of the insurance products.
Product Disclosure Statement - Allianz Motor Vehicle Lease Insurance (Comprehensive Policy) - Issued August 2021
Product Disclosure Statement - Pacific International Insurance Motor Vehicle Lease Insurance Options Policy (combined PDS and FSG) - Issued October 2024
These Financial Services Guides explain the services that Oly provides as an authorised representative of various providers.
Financial Services Guide - Allianz Motor Vehicle Lease Insurance - Issued May 2024
Financial Services Guide - Pacific International Insurance Motor Vehicle Lease Insurance Options Policy (combined PDS and FSG) - Issued October 2024
These documents describe the target markets, distribution conditions and other information about these insurance products.
Target Market Determination – Allianz Motor Vehicle Lease Insurance (Comprehensive Policy) - Issued June 2022
Target Market Determination – Pacific International Insurance Motor Vehicle Lease Insurance Options Policy - Issued September 2024
Insurance
If you chose any of the optional novated lease insurance products, it is included in the cost of your lease. You will receive your policy document when you enter into your lease. Oly Pty Ltd (69 674 252 629 ) (Oly) is authorised by:
• Allianz Australia Insurance Limited (ABN 15 000 122 850, AFSL 234708) to provide general advice on and arrange Motor Vehicle Lease Insurance(Comprehensive Policy) issued by Allianz.
• Pacific International Insurance (ABN 83 169 311 193, AFSL 523921) to provide general advice on and arrange Motor Vehicle Lease Insurance Options Policy issued by Pacific International Insurance.
Insurance disclosures
The Product Disclosure Statement (PDS) for each insurance product includes the full terms and conditions and the Financial Services Guide (FSG) includes information about the financial services Oly provides.The Target Market Determination (TMD) describes the target market for each insurance product, the distribution conditions and other information about these insurances. You can obtain these documents by visiting our website or contacting us at 1300 328 182 or [email protected]
Things you need to know: This webpage does not constitute financial product advice. This general information doesn't take your personal circumstances into account. Please read the PDS and 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 novated leasing is subject to your employer's approval. Oly may pay and/or receive commissions in connection with its services.