Ditch the old vehicle that you’ve been hanging on to and experience driving in a new, shiny car with a novated lease. There are many benefits that come with a novated lease when you’re buying a car.

One of them is the GST savings.

A novated lease is about more than just improving your budgeting skills. It’s about purchasing a car whilst saving on tax for both purchase and running costs. At Novated Choice, we handle everything from start to finish for you, so you can focus on driving your new car without worrying about how much it will cost you in the long term.

However, it’s normal to have questions, and we want you to understand how GST savings work on your new car! 

A Novated Lease Recap:

A novated lease is an agreement that involves the employee, the employer and a novated leasing company. When you buy a car, there are upfront costs, running costs and maintenance fees which you pay for out of your own pocket. When you buy a car with a novated lease, however, the payments you make towards your car are taken from both your pre- and post-tax salary, which reduces your total taxable income. 

The payments you make bundle your regular finance payments, any running costs (including fuel, tyre costs, insurance and servicing) and maintenance fees into one, simple payment. So, it is generally easier to manage your car finance as only one payment is made each time. 

GST Savings: A Breakdown

Traditionally, when you purchase a car, you pay the full retail price, including 10% GST, which you cannot claim back on your taxes. That’s where a novated lease is different. Your GST savings apply across your novated lease agreement, and here’s how:

Purchase Price:

For new vehicles where the car is technically purchased by the leasing company, they can claim the GST back on the vehicle’s full retail price. As a result, you pay for the car’s pre-GST price, saving you the 10% GST you would have had to pay elsewhere. 

Running Costs:

Our everyday car costs, like fuel, servicing, tyres, registration and insurance, are paid from your novated lease account. Where GST applies to your running costs, your employer pays and claims back the GST, and that saving is reflected in your lease costs. It’s a smart way to make your salary go further.

Let’s make it clear: 

How Does It Work For Electric Cars?

A novated lease agreement with an electric car can also be exempt from Fringe Benefits Tax (FBT), increasing your tax savings even further. For your electric car to be eligible for the FBT exemption, it needs to be: 

• A zero- or low-emission vehicle.
• Have been purchased on or after 1 July 2022.
• Below the luxury car tax threshold for fuel-efficient vehicles. 

With the eliminated FBT cost and your payments being deducted from your pre-tax salary, purchasing an electric vehicle with a novated lease expands your tax savings while still giving you access to the benefits of a regular novated lease agreement. 

Ready To Get Started?

We’re committed to giving you a concierge experience, where we handle everything from start to finish. We know that it may seem overwhelming at first (and hard to believe!), but with us by your side, you’ll be driving your new car with major savings in no time! 

1. Choose Your Dream Car: Choose a car that suits your vision and lifestyle.
2. Paperwork You Don’t Need To Do: We’ll calculate your savings and the details of your finance agreement, which we’ll complete with your employer.
3. Get On The Road: With your agreement in place, you can start driving your dream car!

Novated Choice: Easy as 1, 2, 3

At Novated Choice, we handle everything, including paperwork, finding you the best deal, and handing over your car.

Sounds too good to be true, right? Our team will make sure you’re all set up with a novated lease agreement that saves you big on your GST costs.

What’s not to love? It’s convenient and easy. Contact us today to get started.