Salary package car lease?

Thanks for all the helpful replies everyone! I will certainly look into it carefully when their rep calls next week and seek advice from my accountant before making any agreement. I still remain a little skeptical after the flurry of phone calls after my initial enquiry. mark_m explained that they need to make a profit out of the deal while the employer promotes it as a benefit. Thankyou for sharing your experience everyone.


It will be interesting to hear the outcome in your particular case. While we don’t need the specific details, it would be beneficial if you could post some comments on why you made the particular decision you did after you have evaluated your options.


I just want to point out that leases are not loans and there is no actual interest rate. A lease is a contract to use an asset for a fixed period of time with set rental payments. I just mention this because although many finance companies that provide leases quote interest rates, there is no way to compare them because they are essentially made up.

The whole point of novating a lease is that you can move it to another employer without having to break the contract. So you don’t need to pay out the contract or hand it back.

This is very unusual in my experience. Most salary packaging providers charge a fee for use of a (or multiple) fuel card(s) and a fee for arranging servicing and there is no discount. You are usually financially better off buying the fuel/servicing yourself at your preferred supplier and getting reimbursed by your employer.


The fuel savings I can promise are true, I get a monthly statement which shows fuel bought and price paid in leasing, I’ve also always noted my fuel figures in a note book so can compare directly… Statement also shows my fuel economy for the 185,000km’s so far. I work in the Coal Mines, I think I can transfer Lease if going to Mine with same company, other companies use different suppliers. Your company has to have a minimum number of employees wanting to Lease before they are interested. Cheers.

1 Like

Some providers will display costs net of GST e.g. the pump price might be $1.65 per litre but the report will show a price of $1.50 per litre. If this is the case the discount might not be as much as you think.


My experience with novated leases is positive, I used 3 firms across 2 university employers. In the ‘old days’, travelling 25k km per year paid off well. The leg-work involved is pretty extensive, I recall several hours online for each setup. Great savings on the purchase price relative to buying privately. And, everything is budgeted, no financial shocks or ‘pinch points’ over the year.

1 Like

I’m not disputing the deal that you have, just stating that it is very unusual. When I did my first salary packaged lease and the salary packaging company offered several fuel cards, I asked them how much discount I would get. They revealed that there was no discount on the pump price, and as well, the cards had either a monthly fee or a per transaction fee.

They also charged a monthly fee (on top of the standard management fee) for arranging fuel cards, servicing, insurance etc. This fee was not included in the quote, but hidden in very small print at the bottom of the page. Since I had specifically asked about fees and they had not disclosed it I was able to get it refunded.

I’ve heard of these “great savings” but have never seen any deals better than could be negotiated directly with the dealer (either for direct purchase or to lease in a salary package). I have seen salary packaging companies charge large brokerage fees (several thousand dollars in some cases) for finding the car.

I have also seen salary packaging companies claim that you “save” the GST on the purchase price. This is technically true, because since you don’t actually buy the car (the finance company does), you don’t actually pay the purchase GST. However GST is added to the lease rental payments and the residual, resulting in higher GST costs on the purchase overall. Because of the effect of FBT, this GST is still effectively paid by you in the salary packaging process, and so the claims of GST free purchases are misleading (probably intentionally).


On fuel savings I assumed the discount was because LeasePlan has 90,000 or so cars leased which gives them great bargaining power with the fuel companies. A workmate was with a small company and used a GMH lease and his fuel saving was only 3.3c /litre. A service depot I used would regularly pad out the service cost, say it was $1200 from shop, Leaseplan would get it cut down to $800 after getting rid of the overcharging, I had a Dodge Nitro,needed new 20inch tyres, dealer wanted $630 /tyre, LeasePlan price was $500 each plus $150 to fit 4of. My present lease I’m $6500 ahead after 6yrs, I’ll get paid out that but lose abit in tax, running figures are averaged on cars being in cities, I do alot of country driving so my fuel economy is always better, tyre wear better.


The is a Bill currently before Parliament that proposes to exempt the private use of some electric cars from FBT. The proposal includes limitations relating to the type of vehicle, the value of the car and when the car was first acquired.

If you are looking to acquire an electric car, doing so via salary packaging with the proposed exemption might make it more viable.

The proposal is not yet law, and might be subject to change. Further details can be obtained from the below links.


With the recent fuel price hikes, I have found that fuel savings using fuel cards must be a percentage because as the price went up to $2.25 the savings were between 17c and 23c for the 3 fuel cards I have, before they were from 13c to 16c.
I’m now leasing 2 cars, a new Forester for my wife, I have her 3yr old Forester for myself, going good so far after 1 yr.

1 Like

Savings made relating to petrol and other car expenses can be exaggerated by the way information is provided.

When you buy petrol the pump price includes GST. Your employer or packaging provider is entitled to claim a credit for the GST, so only the cost net of GST is debited to you packaging account. In an example where the pump price is $2.20 per litre but you are only charged $1.98 per litre, the 22 cents difference consists of a 2 cents discount relating to the fuel card and 20 cents GST.

The thing with doing a novated lease on an EV is that the electrons you pump in can not be included in the lease, unlike diesel/petrol.

I have a PHEV on a lease and as I’m currently getting 1.2l/100km, my petrol use is minimal (and mostly from the solar panels on the house). Needless to say, the budget for petrol is significantly more than is needed.

A lease on an EV might work for you, but do your homework.

1 Like