Salary packaging provider Smart and car subscription company Karmo have partnered to launch what they say is Australia’s first government-approved novated subscription service with a minimum term of just four months.
The partnership combines the flexibility of car subscription with the tax benefits of novated leasing, offering an alternative to traditional car loans and outright vehicle purchases.
Under the arrangement, customers can access comprehensive vehicle packages that include financing, insurance, roadside assistance, registration, servicing and maintenance in a single payment that reduces taxable income.
“Car ownership in Australia is changing,” says Sid Jha, Group Executive of Novated Leasing and Electric Vehicle Services at Smart. “For anyone who doesn’t want to be locked into a five-year loan, whether they’re professionals, families, employers or growing businesses, this partnership provides a smarter, more flexible alternative.”
The service targets workers seeking short-term mobility solutions without long-term financial commitments, with monthly payments covering all vehicle-related costs.
Karmo CEO Nick Boucher says the partnership addresses growing consumer demand for simplified vehicle access. “It’s the clever way to car,” Boucher says. “Karmo and Smart are fundamentally redefining car access by providing exceptional flexibility and convenience to all for a price point that rivals total cost of ownership.”
Market growth driving change
Karmo reports 500% subscriber growth over the past three years, indicating increasing acceptance of subscription-based vehicle access. The company, established in 2019, positions itself as Australia’s largest car subscription provider.
Smart, an ASX-listed company, currently services more than 500,000 Australians and manages over 80,000 novated leases. The company has operated in salary packaging and employee benefits for over 25 years.
“Our subscription model is validated by over 500% subscriber growth in the last three years,” Boucher says. “While changing consumer mindset takes effort and time, our strategic partnership with Smart will be instrumental in rapidly accelerating market awareness.”
The service offers vehicle options ranging from hybrid hatchbacks and petrol SUVs to electric vehicles, allowing customers to select models suited to their lifestyle and work requirements.
Jha says the partnership reflects shifting expectations around vehicle ownership. “Australians are looking for smarter, more flexible ways to drive the cars they want, for the time they need, while maximising their salary benefits,” he says.
The companies say the service particularly appeals to organisations with mobile or short-term workforces, offering potential benefits for employee attraction and retention.
Smart provides salary packaging benefits to over 2.4 million employees across government, health, education and corporate sectors. Karmo was recently named a finalist in the 2025 Brisbane Lord Mayor’s Business Awards and was shortlisted in the 2025 Deloitte Tech Fast 50.
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