Novated leases
PROs and CONs
at a glance

Novated leasing can be a financially savvy way to get behind the wheel of any new car with even greater potential savings for electric vehicles. Together we can help you weigh the benefits alongside the restrictions and your specific circumstances to make an informed decision.


  • Vehicle can be used 100% for personal use
  • Potential bulk (fleet) discounts on vehicle purchase price
  • GST saving on car purchase (plus any accessories and add-ons)
  • Use pre-tax salary for the payments
  • Bundle car-running costs into your pre-tax repayments
  • Save GST on car running costs
  • EVs and PHEVs are exempt from Fringe Benefits Tax (massively increasing the savings)
  • Lease a new or used car
  • Lease can be transferred to a new employer if you move job
  • Flexibility at the end of the lease term


  • You may need to agree to your employer’s choice of provider
  • Only available to salaried employees
  • Not all employers offer it as a benefit
  • You don’t own the car until the end of the lease
  • Not as flexible for making extra repayments
  • Some novated leases are subject to Fringe Benefits Tax (like most employee perks are)
  • Some vehicles are not eligible (eg non-passenger vehicles)
  • Extra complexity if you move job
  • There’s a residual payment to cover at the end of the lease
  • Slightly more complicated than other finance options

Keep in mind that you can potentially bundle accessories into an EV novated lease (such as Tesla’s Mobile Connector cables which no longer come with the car). However, unfortunately you probably can’t bundle in the cost of installing a home EV charger because it’s considered a home improvement.

Below are some examples of the potential savings on a range of purchase prices. These are examples only and you should seek advice before entering a salary sacrifice arrangement.

Monthly finance

BMW iX1 xDrive 30 – $84,900 plus on-road costs ($89,450 on the road in Victoria)

MG HS Plus PHEV Excite – $48,990 drive-away (national pricing)

Toyota Corolla SX Hatch petrol – $32,760 plus on-road costs ($35,117.60 on the road in Victoria)

Choosing your novated lease term wisely is crucial.

The ATO sets a five year maximum. This can feel like a big commitment.

While you can pay out the lease early, you’re still on the hook for the full contracted payments plus the final ‘residual’ value of the car.

It’s smart to ask for quotes on different terms, for example compare a three year lease with a five year lease.

You might be surprised how small the difference is in your take home pay.

A shorter term could offer greater flexibility and financial peace of mind.



Contact the office

We look forward to helping you with all your business finance needs.

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Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. © 2024