Novated leases and car loans have similar features and some key differences. These include the following.
Regular repayments are made for both.
Balloon payments are an option at the end of each loan.
A novated lease is a three-way deal between you, the lender, and your employer.
You own the vehicle from day one with a regular car loan.
Once the loan term ends on a novated lease, and the balloon payment has been repaid, you own the vehicle.
After-tax earnings are used to finance a car loan, whereas pre and post-tax pay are used for a novated lease.