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What is the novated lease model?
A novated lease is a three-way agreement where an employee leases a car, and their employer makes payments and covers running costs from the employee’s pre-tax salary. This salary sacrifice mechanism reduces taxable income, offering significant tax benefits and simplifying vehicle budgeting for employees.
Novated leases are becoming more accessible, with a growing number of Australian employers adding them to their benefits packages. However, because the model is centred around cost savings, it often results in employees having to compromise with cars that don’t change with their life needs and hold the estimated value from the start of the agreement. Many Tesla and other premium EV novated lessees have been hit by huge price drops over the last two years which forced them into negative equity.
Novated leases are often all-inclusive and cover the cost of maintenance, registration, insurance, and service. However, most novated providers charge steep management fees and early termination fees that can quickly make novated car plans expensive.
Considering a novated lease in Sydney?
Why choose a car subscription over a novated lease
- You’re in control
Unlike a novated lease, which is a three-way agreement between you, your employer, and the novated lease provider, a car subscription with Karmo is solely between you and Karmo. By keeping your employer and car plan separate, you have ultimate control over both your car plan and your career. This makes car subscription the perfect novated lease alternative. Regardless of where life takes you, you are free to swap both your job and your car without any complicated paperwork.
- Escape the residual payment trap
In a car subscription, you aren’t required to own the car you’re in by paying a hefty residual payment at the end of the term, unlike with novated leases. With most manufacturers aggressively cutting prices as markets fluctuate, many novated lessees are faced with negative equity and are forced to cut their losses in the used car market. A car subscription’s fixed weekly fees helps you mitigate financial risks and ensure your capital and savings aren’t eroded.
- Avoid long-term commitments
Most novated leases lock you in for 3-4 years and don’t offer a swap before the end of the minimum term. Car subscriptions with Karmo for Sydney start from just 4 months. This gives you the opportunity to try out a car and make adjustments to your car plan with every term. You’re not tied down to a single car and can drive a car that suits your needs at every stage of your life
- Avoid hidden costs
Novated leases are popular predominantly because they promise tax savings but frequently have hidden costs such as administration fees, ongoing management fees, and high early termination fees. This can make your car access costs significantly higher than what you’ve budgeted for. A car subscription on the other hand provides a single transparent fee that bundles the cost of the car, maintenance, insurance, rego, and roadside assistance, which ensures you never have any unexpected car costs. Novated leases provide a pathway to eventually own the car, but since the residual value you are required to pay is calculated based on the car’s initial value, most novated lessees lose money because of the increased depreciation the automotive market is currently witnessing. If your employer isn’t offering you a novated lease, it might actually be a blessing in disguise.
View our latest subscription cars in Sydney
Mazda
CX-3 Pure
$260
Per Week
Jaecoo
J7 SHS Hybrid
$310
Per Week
Toyota
RAV4 Hybrid
$320
Per Week
Toyota
Kluger Hybrid
$385
Per Week
Isuzu
D-Max
$410
Per Week
Mercedes-Benz
GLB200
$525
Per WeekWhy Choose Karmo as your novated lease alternative in Sydney
- Trusted by customers
Karmo is Australia’s largest car subscription service. In 2024, our customers travelled over 60 million kilometres. With over 300 5-star reviews on Google, Karmo Sydney is committed to making your car subscription as convenient as possible. Our easy no-credit-check application and one simple weekly fee model ensure complete transparency every step of the way.
- Car access made easy
At Karmo, we aren’t just another car lease provider; we’re changing how people are viewing car ownership by simplifying access to new and reliable cars. By partnering with over 130 dealers across Australia, we’re helping thousands of Australians skip long waitlists and drive a car of their choice today.
- Specialist teams that care.
We have dedicated teams in Sydney that are available to assist every step of the way. Unlike leases and rentals, our car subscription model has the customer at the centre, not the car. This ensures a great customer experience throughout your subscription journey.
Karmo vs Other subscriptions vs Novated leases
Karmo car subscriptions, other subscriptions and novated leases both offer car plans. Compared to novated leases Karmo has no joining fees or swap fees and offers significantly more flexibility. Karmo car subscription is flexible and transparent, making it an excellent choice for salaried employees looking for simplified and affordable car access.
Features
Other Subscriptions
Rent to own
New cars
No application, sign up or swap fees
No credit check
Fuel
Registration & Insurance
Maintenance & servicing
No long-term commitment
No hidden costs
Features
Other Subscriptions
Leasing
New cars
No application, sign up or swap fees
No long-term contracts
New car rotation
Registration
Maintenance & servicing
Insurance
No hidden costs
13,000+ satisfied drivers on the road
Here’s what our customers say about their Karmo car subscriptions.
What do we mean by all-inclusive*?
New car experience
The cost of your vehicle is included. Karmo ensures that our vehicles are always new, with mileage limited to 15,000km, providing you with a permanent new car experience.
Vehicle registration
Karmo takes care of all the necessary paperwork and registration costs ensuring that each car is properly registered.
Maintenance & servicing
All servicing, maintenance and tyre costs are covered by Karmo, ensuring that your vehicle remains in optimal condition and saving you money.
Roadside assistance
Karmo offers 24/7 roadside assistance, ensuring that help is just a phone call away in case of emergencies.
Vehicle insurance
Full insurance coverage is included, providing you with financial protection in the event of an accident or damage.
Flexible plans
No more 3 year contracts! You can sign up for the duration you need and have the option to stop or swap at the end of your plan, providing you with flexibility and freedom from lengthy commitments.
Generous mileage
Karmo’s car subscription plans include a generous allowance per week of driving. Any overages are simply charged per KM.
Less fees & no hidden costs
Unlike competitors, Karmo won’t charge you for choosing us! At Karmo you will enjoy zero application, signup and swap fees, making it more accessible and cost-effective compared to other providers.
No long-term commitments
We believe a car subscription service should be just as flexible as any other subscription service. That’s why we provide our drivers a convenient cancellation policy.
*Excludes fuel and toll costs
New car experience
Vehicle registration
Maintenance & servicing
Roadside assistance
Vehicle insurance
Flexible plans
Generous mileage
Less fees & no hidden costs
No long-term commitments
What do we mean by all-inclusive*?
New car experience
New car experience
The cost of your vehicle is included. Karmo ensures that our vehicles are always new, with mileage limited to 15,000km, providing you with a permanent new car experience.
Vehicle registration
Vehicle registration
Karmo takes care of all the necessary paperwork and registration costs ensuring that each car is properly registered.
Maintenance & servicing
Maintenance & servicing
All servicing, maintenance and tyre costs are covered by Karmo, ensuring that your vehicle remains in optimal condition and saving you money.
Roadside assistance
Roadside assistance
Karmo offers 24/7 roadside assistance, ensuring that help is just a phone call away in case of emergencies.
Vehicle insurance
Vehicle insurance
Full insurance coverage is included, providing you with financial protection in the event of an accident or damage.
Flexible plans
Flexible plans
No more 3 year contracts! You can sign up for the duration you need and have the option to stop or swap at the end of your plan, providing you with flexibility and freedom from lengthy commitments.
Generous mileage
Generous mileage
Karmo’s car subscription plans include a generous allowance per week of driving. Any overages are simply charged per KM.
Less fees & no hidden costs
Less fees & no hidden costs
Unlike competitors, Karmo won’t charge you for choosing us! At Karmo you will enjoy zero application, signup and swap fees, making it more accessible and cost-effective compared to other providers.
No long-term commitments
No long-term commitments
We believe a car subscription service should be just as flexible as any other subscription service. That’s why we provide our drivers a convenient cancellation policy.
*Excludes fuel and toll costs
Apply now
Our application process is quick, easy and completely online. We have no application fees, so you can subscribe to your dream car risk-free with Karmo.
- Apply in minutes
The application can be completed in under 5 minutes, and with our quick affordability check you get the added bonus of accessing pre-approval instantly.
- We get in touch
Our team will contact you to find the most suitable car and subscription plan for your needs.
- Drive away, within a day
If your car is in stock, you can drive away the same day and begin your subscription journey!
- 5 min to complete
The latest news
13 April 2026
Leading the Mobility Revolution: Karmo’s CRO Laura Harewood on Modern Leadership
13 April 2026
Leading the Mobility Revolution: Karmo’s CRO Laura Harewood on Modern Leadership
The latest news
Frequently asked questions
Curious about car subscriptions for personal or business use? Our Frequently Asked Questions (FAQ) section is here to help! From understanding how car subscriptions work to the application process and getting behind the wheel, we cover it all.
How am I charged for my Karmo car subscription plan?
To streamline the payment process and ensure convenience, all payments for our car subscription service are charged directly to the credit card that you have allocated. This allows for automated and hassle-free transactions, eliminating the need for manual payments or invoices.
Are there upfront costs required for a car subscription?
At Karmo, we understand the importance of keeping upfront costs to a minimum however, please be aware that our car subscription service does involve some small upfront costs. These include:
- Bond: A refundable bond of $500 – $1500 is required depending on the price of your car to secure the subscription. This amount will be returned to you at the end of the subscription term, provided there are no outstanding charges or damages.
- Security Payment: This amount is composed of your security deposit equivalent to two weeks of subscription, and an advance payment for your first week’s pro-rata subscription. Your two week security deposit will be returned to you at the end of your subscription term provided there are no outstanding charges or damages owed.
What is the eligibility criteria for car subscription?
To qualify for a car subscription, you need to meet the following requirements:
- Age: You must be between the ages of 25 and 75.
- Proof of Serviceability: You need to provide evidence of your ability to cover the subscription costs.
- Valid Driving Licence: You must possess a valid and unrestricted driving licence.
- Driver Declaration: You are required to pass the driver declaration, which ensures compliance with our safety standards.
Does Karmo perform a credit check for a car subscription application?
We do not require a traditional credit check as part of our application process. Instead, we focus on assessing your ability to pay for the service.
To ensure we can make an informed decision and tailor our offer to your specific needs, we kindly request that you provide us with a copy of your pay slip and a copy of your bank statement as part of the application process. These documents help us evaluate your financial capability to meet the payment requirements of the service.
We value your privacy and treat all personal information with the utmost confidentiality. Rest assured that any documents you provide will be handled securely and used solely for the purpose of assessing your eligibility for our service.
If I have been declined for finance on a loan can I still subscribe to a car?
At Karmo, we believe in providing flexible and innovative driving solutions to cater to various needs, even if you may not meet the criteria required by traditional lenders. With Karmo’s subscription options, you may still have the opportunity to subscribe to a car and enjoy the benefits of driving without the constraints of traditional financing.
What happens if I am involved in a car accident in my subscription car?
In the unfortunate event of an incident, here is the process to follow:
- Contact your local Karmo Hub to report the incident as soon as possible.
- If the vehicle is safe to drive, return the vehicle to your local Karmo hub during open hours
- If the vehicle has been towed, please provide information of where the vehicle has been sent as soon as possible.
- A new vehicle can be arranged to continue your subscription plan within one day. However in some rare circumstances Karmo may refuse to renew your subscription plan if you are deemed too high of risk.
- Complete the incident form provided by Karmo, and submit back to your local Karmo Hub as soon as possible.
- Once the vehicle and form is assessed by Karmo, we will submit the claim and manage the insurance process.
- The Damage Excess Fee is then payable by you, which will be refunded if you are cleared ‘not at fault’ by the insurance provider.
- If you have been found to be ‘at fault’, a weekly At Risk Driver Fee will be charged on top of your weekly plan for a period of 12-months from the date of your incident claim. If you have another incident in this 12-month period, the 12-months will start again.
Please remember to prioritise safety in the event of an incident and immediately contact your local Karmo Hub for assistance.
