How does the cost of my car impact my lease payment?

Yes, the price of the vehicle is one of the most important aspects of a Novated Lease and importantly effects how much you will pay each pay period for the lease. The more expensive the car, the higher the lease payment and also the higher the balloon payment or residual value. When getting a number of Novated Lease quotes, the finance is one of the biggest variables. The reason for this is not so much the interest rate but more the price of the car and the amount leased.


A Novated Lease is just a tax-effective way to own your car. It’s still your car so the most important thing is that the car fits your needs and you enjoy driving it. Once you have picked the car you need to decide if you want a new, demo or used car. For a Novated Lease you can choose any car as long as it’s no more than 10 years old at the end of the lease. For example, if you choose a 6-year-old car you can do a 4-year lease or if you choose a new car you can do a 5-year lease and then if you are still happy with the car at the end of the 5 years you can re-lease it for another 5 years.


When choosing a used car, either buy it from a registered motor vehicle dealer who by law needs to provide some degree of warranty, is not allowed to sell a previously written off car that has been fixed and must ensure the vehicle is not under finance with another owner. If you buy a vehicle privately you will need to do all of these checks yourself.

Once you have chosen the car it’s now time to get the best price. A great way to get the best price is to set a limit that fits comfortably in your budget and have that amount pre-approved on a lease. This way you will have the confidence to say to the dealership or seller “this is my budget, I am approved and I am ready to buy, you need to give me your best price or I will go elsewhere”. This puts the seller in the weaker position, and you are negotiating from a position of strength.


Doing a little research on what cars sell for is key. Before negotiating know the price range, pick a point and stick to it. If a seller really wants to sell they will give in. If you are looking at a new car, our Motorbuys site sends your anonymous request to every dealership in the region/s you choose. This means you are more likely to find a dealership wanting the do a deal and give you a great price.


It’s that simple, the less you finance, the lower the novated lease payment, so it really helps to do your research and shop around.