Not all novated leases deliver the same outcome.
And that's not necessarily a bad thing.
The amount someone saves can vary depending on their income, the car they choose and even how they drive. In many cases, the right setup can make a noticeable difference to the overall cost of owning and running a car.
So, what actually impacts novated lease savings?
Here's a breakdown of the biggest factors.
Income Makes a Difference
Income is one of the biggest factors that can impact novated lease savings.
That's because repayments are generally made from your pre-tax salary. In simple terms, reducing your taxable income may help reduce the amount of tax you pay.
Someone on a higher salary may see greater tax savings compared to someone on a lower income, even if they lease the exact same car.
That said, novated leasing is not only beneficial for high-income earners. Many Australians also value the convenience of combining car expenses like fuel, servicing and insurance into one regular payment.
The Car You Choose Matters
The type of car you choose can have a major impact on the overall value of a novated lease.
Some vehicles are cheaper to run. Others may offer stronger tax advantages.
For example, eligible electric vehicles currently benefit from the Electric Car Discount, which may significantly reduce the cost of driving an EV through a novated lease.
Meanwhile, larger petrol vehicles with higher fuel usage and running costs may deliver lower overall savings.
Factors that can impact your result include:
- Purchase price
- Fuel or charging costs
- Insurance premiums
- Servicing costs
- Estimated resale value
- Whether the vehicle qualifies for EV incentives
Choosing a vehicle that suits both your lifestyle and budget is often one of the best ways to maximise value.
Driving Habits Can Change the Numbers
How much you drive can also influence your overall costs.
Someone commuting long distances each week may spend far more on fuel, tyres and servicing than someone who mainly drives occasionally or works from home.
A novated lease can bundle many of these expenses into your repayments, making car costs more predictable and easier to manage.
For EV drivers, charging habits may also impact running costs. Charging mostly at home is often far cheaper than relying heavily on public fast chargers.
Why Savings Vary Between People
There's no single savings figure that applies to everyone.
That's because novated lease outcomes are influenced by a combination of factors, including:
- Salary
- Vehicle type
- Kilometres travelled
- lease term
- Interest rates
- Running costs
- EV eligibility
- Personal tax position
That's why two people driving similar cars can still receive very different repayment figures and savings estimates.
How to Maximise Your Savings
A few smart decisions can make a noticeable difference over the life of a novated lease.
Here are some of the ways people often improve the overall value of their lease.
Consider an Eligible EV
Eligible electric vehicles may offer some of the strongest tax benefits currently available through novated leasing.
When combined with lower running costs, EVs can be more affordable than many people expect.
You can explore the full range of eligible EVs currently available in Australia via the Remunerator EV Hub.
Choose a Car That Fits Your Lifestyle
More expensive doesn't always mean better value.
Choosing a vehicle that realistically suits your day-to-day needs may help keep repayments and running costs under control.
Be Accurate With Your Driving Estimate
Underestimating or overestimating your kilometres can affect your budget.
Providing realistic annual driving estimates helps create a more accurate lease setup from the beginning.
Review Your Running Costs
Fuel, insurance and servicing costs can vary significantly between vehicles.
Comparing these costs before choosing a car may help you avoid unnecessary expenses later on.
The Bottom Line
Novated leasing can be a powerful way to reduce the cost of driving, but the level of savings can vary from person to person.
Factors like income, vehicle choice and driving habits all play a role in the final outcome. That's why personalised quotes are so important.
For many Australians, a novated lease can offer a simpler and potentially more cost-effective way to manage car expenses, especially when tax savings and running costs are taken into account.
Ready to see what your own savings could look like?
Request a personalised quote and explore your options based on your salary, vehicle choice and driving habits.