Fee for no service – What to look out for

Novated Lease Contract

The Royal Commission into the Misconduct of the Banking, Superannuation and Financial Services Industries certainly was a long time coming.

I know the Commission isn’t exactly ground-breaking news anymore, but INSIDE EDGE are in a unique position to discuss the flow on effect involving the Financial Services heavy hitters whom have come under scrutiny, as well as its relevance and impact on our Novated Leasing world.

A much-needed shake-up

As always, and since our inception, INSIDE EDGE loudly pride itself on the transparency and integrity in which we operate as a business and serve our clients.

Being a disruptor in a hyper competitive industry such as Novated Leasing, I can tell you there are many ways that providers can produce extra margin within a Novated Lease package from unsuspecting employees.

Sadly, this is the reality of a non-regulated finance product and hence the necessity for ASIC and The Royal Commission to come in and ask the hard questions… and I am all for it.

In my opinion the industry has been questionable for a long time with suppliers heavily focused on shareholder dividends, profit margins, and unwanted add-on products to maximise brokerages.

This greedy appetite for inorganic growth and market share domination evidently has diminished the benefit and product that I hold dear. This ‘cash grab’ mentality encourages employees participating in Novated Lease programs to be taken advantage of.

How to spot a bad deal

This money hungry sales formula demonstrates high profit in the short term but burns repeat business opportunities that is pivotal for company’s long-term success. It is said ‘it takes years to build a reputation and seconds to tarnish it’, and it’s safe to say The Royal Commission has proved just that.

What the commission won’t be able to do though is stamp out bad practice completely. There are some easily-manipulated components of a lease which employees need to look out for:

  • Interest rate: Clarity on the holistic finance amount and not just the vehicle price component has always been secretive. This is because all of the add-on and ancillary products, brokerage and fees are capitalised in the finance amount.
  • Add-on products: Opt-in rather than opt-out! When I go out for dinner and order a burger with cheese, that’s what I expect to receive and pay for. I don’t want you to add the bacon, lettuce and tomato and then try and hide how you plan to get the extra money from me — that’s just wrong. Similarly, with a Novated Leases ASIC and The Royal Commission have identified suppliers doing just this with products such as:
    • Redundancy Insurance
    • Carbon Offset Programs
    • GAP Insurance
    • Tyre and Rim Insurance
    • Accident Management; and
    • Roadside Assistance

No transparency? No deal

Customers need to be on the lookout for all these products and make the informed decision if they are suitable to your personal circumstances. No one needs to have them jammed into your Novated Lease unknowing of cost and the service (or lack of) the product provides you.

At INSIDE EDGE, we are a very proud privately-owned Australian business and as a boutique Novated Lease provider, our ethos is to keep more money in your employees’ pockets, not in those of the shareholders. We do this by maintaining transparency with our customer and supplier relationships at all times.

Part of our consultancy model is to openly discuss fees and charges, interest rates, and pass on 100% of discounts we obtain through our supply chain. This level of integrity is rare in the industry and allows INSIDE EDGE to obtain a retention rate and generate repeat customers like no other.


If you are concerned about the level of transparency and lack of integrity with your current Novated lease provider, INSIDE EDGE is the company you need to be talking to.

Please call our office on 1300 55 1987 or visit our website on www.iedge.com.au for a confidential discussion.

Alternatively, discover how one large Australian retailer used Novated Leasing to free itself of 160 company cars with no extra financial burden or strain to employee relationship.

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