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15 March 2026

Choosing the Right Car for a Novated Lease | Beginner Guide

A Complete Beginner's Guide to Choosing the Right Car for a Novated Lease

The right car matters.

Choose well and a novated lease can save you thousands.

Choose poorly and the costs can add up.

Many people focus only on the monthly payment. But the best novated lease decision starts much earlier, with choosing the right car for your lifestyle, budget and commuting habits.

This guide walks through how to assess your needs, compare vehicle types and understand how residual values affect long term cost.

Start With Your Lifestyle and Driving Habits

Before comparing models, start with how you actually use a car.

A novated lease bundles most vehicle costs into one payment. This includes finance, servicing, insurance, fuel or charging, tyres and registration. That means the type of car you choose directly affects your overall running costs. 

Ask yourself a few key questions:

How far do you drive each week?

What type of driving do you do most?

How much space do you need?

How long will you keep it for?

Thinking about these factors early helps narrow your options quickly.

Set a Realistic Budget

A novated lease can make a vehicle more affordable because payments come from your salary before tax.

However, the vehicle price still matters.

A good starting point is to decide what level of monthly repayment feels comfortable within your budget.

Remember that the lease payment typically includes:

Because these costs are bundled together, the monthly figure gives a clearer view of total ownership cost compared to traditional car loans.

Many drivers are surprised to find that a slightly more expensive but efficient vehicle can actually cost less over the life of the lease.

EV vs Hybrid vs Petrol Through a Novated Lease

One of the biggest decisions today is choosing the vehicle type.

Each option has different advantages depending on how you drive and what costs matter most.

Electric Vehicles (EVs):

Electric vehicles have grown rapidly in Australia. They are also popular choices for novated leasing.

Why?

Because EVs often have lower running costs.

Electric vehicles typically offer:

Another major factor is the Electric Car Discount, which currently provides Fringe Benefits Tax exemption for eligible EVs under a price threshold. This policy is currently under review and there is no guarantee it will remain unchanged in future.

For many drivers, novated leasing provides a lower risk way to try an EV because all running costs are packaged together.

Best for:


Hybrid Vehicles

Hybrids combine a petrol engine with an electric motor.

They do not need to be plugged in and can deliver strong fuel efficiency, especially in city driving.

Advantages include:

For drivers who are not ready to go fully electric, hybrids can be a strong middle ground.

Best for:


Petrol Vehicles

Petrol cars remain the most common vehicle type in Australia.

They offer familiarity, a wide range of models and easy refuelling anywhere.

While fuel costs can be a higher over time, petrol vehicles may still suit certain drivers.

Best for:

Why Residual Value Matters in a Novated Lease

Once concept that confuses many first-time lease customers is residual value.

The residual value is the estimated value of the car at the end of the lease term.

Instead of paying off the full vehicle cost during the lease, a portion remains as the residual.

For example:

During the lease you repay the difference between the purchase price and residual value.

This structure helps keep monthly payments lower.

At the end of the lease you have several options:

Residual values are set according to ATO guidelines and depend on the lease term. Longer leases generally have lower residual percentages.

Understanding residuals is important because they affect both monthly repayments and the final decision at the end of the lease.


Choosing a Car That Holds Its Value

Resale value plays a big role in long term leasing costs.

Vehicles that hold their value well can provide better outcomes at the end of the lease.

Factors that influence resale value include:

Electric vehicles are also beginning to establish stronger resale trends as demand continues to grow.

When choosing a car, consider not only how it fits your lifestyle today but also how desirable it will be in a few years.

Common Mistakes First Time Leaser Drivers Make

Many first time novated lease customers focus on the wrong factors.

Here a few common mistakes to avoid.

Choosing a car based only on purchase price

Running costs matter just as much. Fuel, servicing and insurance can significantly affect overall cost.

Ignoring commute patterns

A car that suits daily city driving may be very different from one suited to long highway trips.

Overlooking future needs

Think about life changes such as moving house, starting a family or longer commutes.

Not comparing vehicle types

EVs, hybrids and petrol vehicles all offer different advantages depending on how you drive.

Taking time to compare options usually leads to a better long-term outcome.


How Remunerator Helps You Choose the Right Car

Choosing the right car can feel overwhelming, especially if it is your first novated lease.

That is where guidance helps. 

Remunerator's Motorsearch team helps customers compare vehicles, assess running costs and understand how different cars affect their lease payments.

We help you:

You can also explore savings using the Remunerator Novated Lease Calculator.


Ready to Find the Right Car?

Choosing the right car is the first step toward getting the most value from a novated lease.

When your vehicle suits your lifestyle, budget and driving habits, the savings and convenience become much clearer.

If you are considering your next car, our team can help you compare options and find the right fit.

Request a quote or explore your options today.