Compare Novated Lease Providers

How to Compare Novated Lease Providers in Australia

Choosing the right novated lease provider can make a significant difference to the total cost of your lease. While the tax and GST savings are largely the same regardless of provider, the finance rate, establishment fee and ongoing monthly fees vary considerably between salary packaging companies.

What is a novated lease finance rate?

The finance rate is the interest rate charged on the lease finance component — similar to an interest rate on a car loan. A lower finance rate means lower lease payments. Even a small difference in rate can save hundreds of dollars over a 3 to 5 year lease term. Always compare the finance rate alongside fees when evaluating providers.

Establishment fee vs monthly fee

Most novated lease providers charge an establishment fee when the lease is set up and an ongoing monthly administration fee. The establishment fee is a one-off cost while the monthly fee compounds over the lease term. On a 3 year lease a $15/month fee adds up to $540 — worth considering alongside the upfront establishment fee when comparing total costs.

What else to look for in a provider

Beyond rates and fees, consider the provider's experience, the quality of their online portal for managing your lease account, their fuel card network, and how well they handle the administration of FBT and running costs. Some employers have a preferred or contracted novated lease provider — always check with your HR or payroll team first.

All information is general in nature and does not constitute financial or tax advice. Novated lease arrangements involve complex FBT rules. Please consult your employer's salary packaging provider and a qualified tax adviser before entering a novated lease.