Getting two novated lease quotes for the same car does not necessarily mean you are comparing the same deal.
One quote might show a lower payroll deduction but use different running-cost assumptions. Another could have a better vehicle purchase price but higher finance costs. Lease terms, residual values, administration fees and even estimated kilometres can also change the final numbers.
That is why the best way to compare novated lease quotes is to look beyond the headline saving or regular deduction.
You need to understand what you are actually paying for, what assumptions have been used and what remains payable at the end of the lease.
What Should You Compare on a Novated Lease Quote?
Start with these figures:
- Vehicle purchase price
- Lease term
- Finance cost or rate
- Pre-tax and post-tax deductions
- Estimated running costs
- Administration and other fees
- Residual value
- Total effect on take-home pay
- Input Tax Credit on the purchase price of the vehicle
If two quotes differ significantly, working through these items individually can usually reveal why.
The lowest regular deduction is not automatically the lowest-cost novated lease.
1. Compare the Actual Vehicle Price First
Before comparing the finance, check whether both quotes are financing the same amount.
Two providers may source the same vehicle at different prices due to dealer negotiations, fleet arrangements, current promotions or optional extras.
For example, imagine one quote is based on a vehicle price of $52,000 while another provider sources the same specification for $49,500.
Even if the second quote uses a similar finance structure, starting with a $2,500 lower vehicle cost can affect the overall lease.
Check that you are comparing the same:
- Make and model
- Variant
- Model year
- Factory options
- Accessories
- Dealer charges
- On-road costs where applicable
This is one reason Fingo looks at vehicle sourcing as well as the novated lease itself. The price of the car can matter just as much as how the lease is structured.
Found the Car You Want?
Fingo can help source your vehicle and compare competitive dealer pricing before the novated lease is finalised.
2. Make Sure the Lease Terms Are the Same
A three-year quote should not be directly compared with a five-year quote based only on the regular deduction.
A longer lease term can reduce the amount deducted each pay cycle because the finance is spread over a longer period.
But that does not automatically mean it costs less overall.
The lease term also affects the vehicle’s residual value and how long you remain in the arrangement.
When comparing quotes, first make sure they use the same lease duration. If they do not, ask for equivalent terms so you can make a more meaningful comparison.
3. Check the Finance Cost, Not Just the Deduction
This is one of the most important areas to examine.
A novated lease quote can contain multiple components, so the headline payroll deduction does not tell you the finance cost by itself.
Ask the provider to explain the finance component clearly, including any rate or finance charges that apply.
Then compare that figure across quotes.
A provider with a lower vehicle price could still produce a more expensive finance outcome if its financing costs are considerably higher.
Likewise, a quote that initially looks expensive may include more realistic running-cost allowances than a cheaper-looking alternative.
The aim is to understand why the numbers differ, not simply which number on the first page is smallest.
4. Compare the Running-Cost Budgets Line by Line
A fully maintained novated lease can include budgeted vehicle expenses in the regular payroll deduction.
Depending on the arrangement, these may include:
- Registration
- Comprehensive insurance
- Fuel or EV charging
- Servicing and maintenance
- Tyres
- Roadside assistance
- Other eligible vehicle expenses
This is where two quotes can appear very different even when the underlying vehicle and finance are similar.
Imagine Quote A budgets $1,200 annually for insurance while Quote B budgets $2,000.
Quote A will naturally show a lower deduction.
But if your actual insurance premium is closer to $2,000, that does not necessarily mean Quote A was genuinely cheaper. It may simply have started with a lower estimate.
The same applies to fuel, charging, servicing and tyres.
Your expected annual kilometres are particularly important because they can influence several of these estimates.
Review the running costs included in a novated lease and make sure the quote reflects how you actually expect to use the car.
5. Look for Administration and Other Fees
Small recurring fees can become meaningful when multiplied across several years.
Check whether the quote includes:
- Establishment fees
- Monthly administration fees
- Account management fees
- Finance-related fees
- Early termination costs or processes
- Other provider charges
A $20 or $30 monthly difference may not look significant on its own, but over a five-year arrangement it adds up.
This does not mean the provider with the lowest fee is automatically the better option. Service, support and what is included can differ.
The important thing is knowing what you are paying for.
Want to Compare Your Novated Lease Numbers?
Fingo can help you look at the complete picture, including vehicle price, lease structure and estimated running costs.
6. Check the Residual Value
The residual value is the amount remaining on the vehicle at the end of the lease.
It is not an optional extra that appears unexpectedly when the lease finishes. It is a fundamental part of how the lease is structured.
The Australian Taxation Office provides guidance around acceptable minimum residual values for leased assets. For a car with an eight-year effective life, commonly referenced minimum percentages include 65.63% after one year, 56.25% after two years, 46.88% after three years, 37.50% after four years and 28.13% after five years.
The exact treatment of your arrangement should be confirmed with your provider.
When comparing quotes, check:
- Whether the residual values are comparable
- Whether GST treatment is clearly shown
- What happens when the lease ends
- Your options if you want to keep the vehicle
- What happens if the vehicle’s market value differs from the residual
A quote should not look artificially attractive simply because an important end-of-lease amount has been overlooked.
7. Understand Pre-Tax and Post-Tax Deductions
Do not compare two quotes solely by looking at the pre-tax deduction.
Depending on the vehicle and arrangement, the quote may contain both pre-tax and post-tax components.
For eligible battery-electric vehicles, the current FBT exemption can also materially change how salary packaging is structured when all relevant requirements are satisfied.
For other vehicles, the tax treatment may be different.
That means a petrol SUV and an eligible EV with similar purchase prices can produce quite different salary packaging outcomes.
When comparing quotes, ask the provider to show clearly:
What is deducted pre-tax? What is deducted post-tax? And what is the estimated final impact on my take-home pay?
The last figure is particularly useful because it brings the different components together.
8. Compare the Take-Home Pay Impact
This is often more useful than looking at the total payroll deduction.
Suppose a quote shows $700 being allocated to the lease each fortnight. That does not necessarily mean your take-home pay falls by exactly $700.
Salary packaging can change the tax calculation, so the actual estimated reduction in disposable pay may be different.
For comparison purposes, look at the estimated take-home pay before the novated lease and after the novated lease.
Then compare that figure across providers using the same salary, pay frequency, vehicle and lease term.
If the assumptions are different, the comparison becomes less reliable.
9. Input Tax Credit on the purchase price
An Input Tax Credit (ITC) is the GST credit that can generally be claimed on eligible GST-inclusive costs associated with a novated lease when you purchase a vehicle from a dealer or business, effectively reducing the cost of the vehicle and/or eligible lease expenses. When comparing quotes from different novated lease providers, it is important to check whether ITCs are available, how they have been calculated, and where the benefit has been applied, as providers may present or pass on these GST savings differently. This can make one quote appear cheaper even when the underlying costs are similar. This is particularly important for used vehicles purchased privately, where the purchase price may not include GST and therefore no vehicle purchase ITC may be available.
What Does a Proper Quote Comparison Look Like?
A simple comparison table can make differences much easier to identify.
| Quote Detail | Quote A | Quote B |
|---|---|---|
| Vehicle price | $48,500 | $46,900 |
| Lease term | 5 years | 5 years |
| Finance rate | 8.1% | 7.4% |
| Annual kilometres | 15,000km | 15,000km |
| Insurance budget | $1,500/year | $1,850/year |
| Fuel/charging budget | $1,200/year | $1,200/year |
| Servicing budget | $650/year | $700/year |
| Administration fees | $28/month | $20/month |
| Residual value | $13,640 | $13,190 |
| Estimated take-home pay impact | $515/fortnight | $498/fortnight |
Do not worry if one provider uses slightly different terminology. The objective is to identify the equivalent numbers and compare them on the same basis.
What Else Should You Ask Before Signing?
A good quote comparison should also consider what happens when circumstances change.
Ask questions such as:
- What happens if I change employers?
- What happens if I lose my job?
- Can the lease be transferred to another employer?
- What happens if my running costs are higher or lower than budgeted?
- Can I end the lease early?
- How is an early payout calculated?
- What happens to unused running-cost funds?
- What are my options at the end of the lease?
These questions may not change the attractive headline figure on the quote, but they can significantly affect your experience later.
If you are also considering a traditional loan, comparing the lease with car finance can help you understand the differences rather than assuming one structure is automatically cheaper.
Have a Novated Lease Quote to Compare?
Before committing, look beyond the headline saving and compare the vehicle, finance, running costs, residual and overall take-home pay impact.
Frequently Asked Questions
Should I choose the novated lease with the lowest payroll deduction?
Not necessarily. A lower deduction may result from a longer lease term, lower running-cost estimates or other differences in the quote. Compare equivalent assumptions before deciding.
Can different novated lease providers quote different prices for the same car?
Yes. Vehicle sourcing and dealer pricing can differ between providers, which can change the amount that ultimately needs to be financed.
Why are the running costs different between quotes?
Providers may use different assumptions for annual kilometres, insurance, fuel or charging, servicing and tyres. Check whether each budget realistically reflects your expected vehicle use.
What is the residual value on a novated lease?
The residual is the amount remaining on the vehicle at the end of the lease. The ATO provides guidance on acceptable minimum residual values, which you can review in its official car leasing and residual value guidance.
Can I compare an EV novated lease with a petrol vehicle quote?
Yes, but be careful when comparing the tax treatment. An eligible battery-electric vehicle may qualify for the EV FBT exemption when the relevant requirements are satisfied, which can materially affect the salary packaging calculation.
How Do You Know Which Novated Lease Quote Is Better?
The better comparison is the one based on equivalent assumptions and the complete cost, rather than whichever quote displays the largest advertised saving.
Start with the vehicle price. Then work through finance costs, the lease term, realistic running-cost budgets, fees, tax treatment, residual value and the final effect on your take-home pay.
If something differs significantly, ask why.
A transparent quote should make it possible to understand where your money is going and what obligations remain throughout and at the end of the lease.
