Novated lease vs car loan calculator
A novated lease can beat a car loan after tax — or quietly cost you more. It turns on your salary, the car and how it is packaged, so the only way to judge it is on your own numbers. Enter your salary, the car price, the term and your rough running costs to see an indicative after-tax comparison side by side.
What the comparison shows
The calculator estimates your net annual cost under each option — what each one really costs you after the tax effects — on a fair like-for-like basis where both options end with you owning the car. The car loan side is computed by the same finance engine that powers our live quotes, using a fixed demonstration rate. The novated lease side models the salary-packaging benefit: part of the cost comes out of pre-tax salary, GST is recovered on the car and running costs, and fringe benefits tax is handled with the statutory method (or skipped for an eligible EV). It also counts the residual you pay out at the end to own the car, plus an indicative annual management fee — costs a plain car loan does not carry.
Because the lease benefit scales with your marginal tax rate, you will usually see the lease pull ahead as salary rises, and an eligible EV widen the gap further thanks to the FBT exemption. On a lower income with a conventional car, a plain car loan often comes out cheaper and simpler once the residual and packaging fees are counted.
Why the lease numbers are illustrative
The lease side uses simplified, published ATO settings — resident marginal tax rates, the statutory FBT formula, the GST credit cap and the minimum residual for the term. It does not know your packaging provider's fees, your exact tax position, any HELP debt or offsets, or the specific vehicle's treatment. Treat the result as a directional guide, not a quote, and confirm the detail with a licensed tax or financial adviser.
To keep the comparison fair, both options are costed through to owning the car outright: a novated lease leaves a residual owing at the end of the term, so the calculator adds that residual buyout (including GST) to the lease total rather than ignoring it. The residual figure is shown so you can see how much of the lease total it accounts for.
From estimate to real numbers
When the comparison points one way, the next step is genuine, comparable quotes. Hit get approved and we run your details across our lender panel and lay out the real cost of the finance — so the decision rests on numbers you can stand behind rather than a packager's brochure.
Optional — both default to indicative estimates (a $550 annual packaging fee and a 8.5% demonstration rate). Enter your own quoted figures for a result closer to your real deal. The rate applies to both options for a like-for-like comparison.
Applies the statutory FBT method (a post-tax contribution offsets FBT).
Novated lease
$14,728
net per year
$87,703 over 5 years
Car loan
$20,310
net per year
$101,550 over 5 years
The novated lease is about $13,846 cheaper over 5 years.
Like-for-like: both totals end with you owning the car. The lease total includes paying out the residual (about $14,065 incl. GST) at the end, plus an annual $550 lease management fee.
Based on FY2024-25 ATO settings.
Illustrative only — not financial, tax or credit advice, and not a quote or offer of finance. Both options are costed on a like-for-like basis through to owning the car outright: the loan repayment is computed with our shared finance engine at the finance rate you enter (defaulting to a demonstration rate), and the lease side uses simplified published ATO settings (marginal tax rates, the statutory FBT method, GST credit cap and minimum residuals), includes paying out the lease residual (incl. GST) at the end and the annual packaging fee you enter (defaulting to an indicative estimate). The packaging fee and finance rate are user-adjustable estimates — real provider fees and quoted rates vary widely. Your actual outcome depends on your salary, the vehicle, real packaging fees and your tax position. Confirm with a licensed tax or financial adviser before deciding.
Frequently asked questions
Is this novated lease calculator accurate?
It is an indicative model, not a quote. The car-loan side uses standard amortisation maths at a fixed demonstration rate, and the lease side applies simplified published ATO settings. The shape of the comparison is realistic, but your actual outcome depends on your exact tax position, packaging fees and the specific vehicle, which only proper advice and a real quote can confirm.
Why does a higher salary favour the novated lease?
The core saving comes from paying part of the cost out of pre-tax salary, so the benefit is worth your marginal tax rate. The higher your income, the higher that rate, and the more each pre-tax dollar saves you. That is why a novated lease tends to look better for higher earners and a plain car loan often wins on a lower marginal rate.
What difference does an electric vehicle make?
An eligible low- or zero-emission vehicle below the relevant threshold can be exempt from fringe benefits tax on a novated lease, which removes the post-tax contribution the statutory method would otherwise require. Toggle the EV option to see how much that exemption shifts the comparison — it is often the single biggest factor.
Does it account for the residual at the end?
Yes. The residual (balloon) a novated lease leaves owing is set to the ATO minimum for the term, and the calculator adds that residual buyout — including GST — to the lease total. That keeps the comparison fair, because both options are then costed through to you owning the car outright rather than leaving the lease's end-of-term lump sum out of the maths.