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About: Novated lease     Goto   Sponge   NotDistinct   Permalink

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A novated lease is a motor vehicle lease which has been novated, that is, the obligations in the contract have been transferred from one party to another. A lease is novated with a three way agreement (Deed of novation) between the lessee, the lessor (usually a finance company), and a third party, under which all parties agree that the third party will take on some or all of the lessee's obligations under the lease (generally this is making the rental payments instead of the lessee).