Endeavour Fleet
Login

Novated Lease Balloon Payment

Discover how a residual value works and what your options are when it falls due.

What is a novated lease "balloon payment"?

A novated lease residual value (or balloon payment) is a lump sum payment required at the end of your lease term. It represents the remaining value of the car after all your regular salary packaging deductions have been made over the life of the lease.

When you enter into a novated lease, you don't pay off the entire purchase price of the vehicle during the lease term. The portion of the car's purchase price left unpaid at the end of the lease is your residual value, and the fixed amount will be shown on your novated lease quote.

  • We display your residual value upfront on your novated leasing quote
  • Our online calculator gives you an estimate so you can forecast end-of-lease scenarios
  • We send reminders as you approach the end of your lease

Why is a balloon payment required?

The ATO sets a minimum
Novated leases must comply with ATO rules to qualify as a genuine lease arrangement and provide the intended tax benefits. Every lease we arrange is structured to meet those requirements.
It can lower your ongoing deductions
Because you're not paying off the full purchase price during the lease, your regular deductions may be lower than other forms of vehicle finance - and our fleet buying power can help further.

How the balloon payment is calculated

The residual value is a pre-calculated percentage of the vehicle's original purchase price. This percentage is set by the duration of your lease term, meeting the minimum residual guidelines established by the ATO - the longer the term, the lower the required percentage, reflecting greater depreciation over time.

Lease termEndeavour Fleet residual value
1-year lease65.50% of the vehicle's purchase price
2-year lease56.25% of the vehicle's purchase price
3-year lease47.00% of the vehicle's purchase price
4-year lease37.50% of the vehicle's purchase price
5-year lease28.25% of the vehicle's purchase price

For example, on a $40,000 vehicle over a 3-year lease, the residual value would be approximately $18,800 (47% of $40,000). Your personalised quote will show the exact figure for your vehicle and term.

When do you pay it, and what are your options?

The balloon payment is due when your lease term ends. Paying it from your own savings is one option, but the end of a novated lease is designed to be flexible - you have three paths to choose from.

Upgrade to a new car
Sell your current vehicle and use the proceeds to pay out the residual on your old lease. Any surplus above the residual is yours to keep, and you roll straight into a new lease.
Refinance the same car
Keep the car you have. The residual value becomes the starting balance for a new lease term, and because that balance is lower than the original purchase price, your regular deductions may fall.
Pay it out and own the car
Pay the pre-agreed residual amount directly to the financier. Once it clears, the car is entirely yours - no more lease payments, and you're free to keep it, sell it or trade it in.

Balloon payment questions

See your own residual value

Run your vehicle and lease term through our calculator to see an illustrative residual value, or speak with the Endeavour Fleet team about your end-of-lease options.

Use the CalculatorCall (02) 9524 1233

The content of this website is general information only. All calculations and figures are illustrative examples, not a quote or offer of finance, and do not account for your personal circumstances. Endeavour Fleet recommends you seek independent financial, legal and taxation advice to determine whether a novated lease is right for you. Whilst we provide this information in good faith, it may contain errors and should be verified before you rely on it.