Benefits of Novated Leasing

For many Australians, owning a car is essential — but it can also be one of the most significant personal expenses. Enter novated leasing: a salary packaging arrangement that can help reduce the cost of owning and running a vehicle.

If you’re a salaried employee, novated leasing offers real financial benefits that standard car loans simply can’t match. Here’s a breakdown of the top five.

1. Tax Savings Through Salary Packaging

The biggest drawcard of novated leasing is the potential to reduce your taxable income.

How it works: Your lease payments and car running costs are deducted from your pre-tax salary, which lowers the amount of income you’re taxed on. This can result in thousands of dollars in annual savings — especially for mid-to-high income earners.

2. GST Savings on Vehicle Purchase and Running Costs

When you purchase a car via novated lease, you don’t pay GST on the vehicle’s purchase price — a 10% saving upfront. In addition, ongoing running costs (fuel, servicing, insurance, etc.) are typically claimed GST-free through your employer.

This means more of your salary goes toward the vehicle itself, not the tax.

3. Bundled Vehicle Expenses Make Budgeting Easy

A novated lease isn’t just about the car — it also covers a full suite of running costs, including:

• Registration

• Insurance

• Servicing and maintenance

• Tyres

• Fuel or EV charging

These costs are bundled into one simple, regular deduction from your salary. It’s an effective way to manage your cash flow, avoid bill shocks, and keep your vehicle in top condition.