How novated leasing works
A car costs more than its purchase price—fuel, tyres, insurance, maintenance, registration and finance all add up. A novated lease lets you pay for these expenses from your pre-tax salary, slashing your tax and boosting your take-home pay.
What is a novated lease?
A novated lease is a salary packaging arrangement between you, your employer and a leasing company. Your employer deducts the lease payments and running costs from your pre-tax salary, while you keep complete control of the vehicle for personal use—without any extra tax implications.
Because the costs come out before income tax is calculated, your taxable income drops and you take home more each pay. It’s one of the most tax-effective ways to own and run a car in Australia.
The key tax advantages
Novated leasing turns everyday motoring costs into pre-tax expenses, and unlocks GST savings most car buyers never see. The headline benefits include:
- No GST on the vehicle purchase price—an instant 10% saving.
- GST on fuel, servicing, insurance and other running costs is also claimed back.
- Eligible electric vehicles receive 100% tax-free treatment under the current Federal Government FBT exemption.
- No luxury car tax threshold issue on EVs priced below $91,387.
The combined effect is thousands of dollars in savings across the term of the lease, on top of the convenience of having every car expense bundled into one simple payment.
Convenience and no more big car bills
You can include all of your vehicle running costs in the lease to maximise your tax savings. A fuel card covers fuel, tyres and servicing, while registration and insurance invoices are simply submitted for payment on your behalf.
That makes a novated lease an effective budgeting tool as well as a tax saver—predictable monthly costs, no surprise bills, and one team taking care of every line item that comes with running your car.
New, used or multiple cars can be packaged
Novated leases aren’t just for brand new cars. You have flexibility on the type, age and number of vehicles you can salary package:
- New, demo and used vehicles – Most lenders allow vehicles up to 12 years old at the end of the lease. For example, a seven-year-old car can be packaged on a five-year term.
- Lease-back on a car you already own – If you already own a vehicle, or have it on existing finance, we can arrange a lease-back so you can start enjoying the tax savings on the car you’ve already chosen.
- Multiple novated leases – You can run more than one novated lease at a time, which makes it easy to maximise tax benefits across the family vehicles.
Who can drive the car?
The novated lease is in your name, but you’re not the only one who can use it. Any person can drive your car provided they are lawfully covered under your insurance policy—so partners, family members and approved drivers can all share the keys.
That makes a novated lease a genuinely practical choice for households, not just individuals, and means the car can do exactly what you need it to do day-to-day.
Government employees: compare your provider’s quote with ours
We offer government employees choice. Most local, state and federal government departments allow their employees to choose the car, the finance and the insurance on their novated lease. Vehicle Solutions Australia can assist with competitive, transparent quotes and clear advice.
Always obtain a second quote before you sign—it’s the easiest way to save thousands of dollars over the term of your novated lease, and there’s no obligation to switch if you’re already happy with your existing provider.
Your options at the end of the lease
Your novated lease doesn’t lock you into one path. When the term ends, you choose what happens next.
- Pay the residual and keep the car – Settle the residual value at the end of the lease and the car is yours to keep, sell or pass on.
- Refinance for another term – Roll the residual into a new lease and continue enjoying pre-tax payments without changing vehicles.
- Trade in for a new or used vehicle – Use the equity in your current car to step into your next novated lease and keep the savings going.
How much will a novated lease save me in tax?
Use our novated lease calculator—it’s free, and we don’t ask for your personal details. That means you can run as many quotes as you like across different car prices, salary levels and lease terms, without anyone following up.
The calculator only needs a few simple details and gives you an immediate quote, so you can see your potential savings before you talk to anyone.
Car type
Cost to your take-home pay
— per week
Includes finance, fuel/charge, tyres, servicing, insurance and registration renewals.
Your tax saving over the term
—
—
—
—
A detailed quote will allow you to get all your questions answered and make a more informed decision.
Smart EV novated leasing
Eligible electric vehicles receive 100% tax-free treatment under the Federal Government’s EV FBT exemption, and the luxury car tax threshold doesn’t apply to EVs priced below $91,387.
That means even more of your salary goes toward driving the car instead of paying tax—making EVs one of the most powerful novated lease choices available today.
Fleet discounts on every car
Vehicle Solutions Australia provides fleet discounts on new cars Australia-wide. Through our sister company MotorBuys, you can crowdsource the best deal from every dealership in the country.
- Submit an anonymous request for a new or used car.
- Dealerships compete to offer the best price.
- Lower purchase price, lower lease payments, more savings in your pocket.
Step 1: Get a quote on the car of your choice
Use our online calculator and download the fact sheet to see how salary packaging can save you thousands on driving. The calculator only needs a few simple details, returns an immediate quote, and never asks for personal information.
Run the numbers across the cars you’re considering, compare new versus used, and explore what changing the term or salary level does to your take-home pay.
Step 2 & 3: Pre-approval, documents and delivery
Apply for finance pre-approval online, or call us to complete your application over the phone with same-day approval. Pre-approval is free, locks in the current fixed rate for up to three months and lets you shop with confidence and no obligation.
Once you’ve chosen your car, we produce all of the documents and walk through each one with you in detail. We make sure you fully understand the agreement before you sign. Then we settle the deal—and you collect your car knowing your tax savings and budgeted running costs are all sorted.
Step 4: Stop paying tax on your new car
Salary packaging or a novated lease simply lets you pay for these expenses before tax, so you pay less tax. That means more money in your pocket every pay, and the convenience of all your vehicle running costs paid for you.
One simple bundled payment
Fuel, registration, insurance, tyres and servicing are all bundled into one pre-tax payment. No unexpected bills, no budgeting stress, no chasing receipts—just a single deduction from each pay that covers your car.
Just drive—we manage the rest
Use your fuel card for fuel, tyres and servicing, and send registration and insurance invoices straight to us. We handle payment and reporting so you can focus on driving the car you actually wanted.
Frequently asked questions
Common questions about novated leasing, tax savings and what happens at the end of your lease.
Your dream car is a few clicks away
In a few simple clicks our calculator can estimate the cost of any vehicle on your salary. It's free, requires no personal details and you can do as many quotes as you need.