Car Loan vs Novated Lease: Which Is Cheaper?
Choosing between a novated lease and a car loan is one of the most important financial decisions car buyers face. This calculator compares the real after-tax cost of both options side by side.
Novated Lease Calculator
Compare novated lease, car loan and cash purchase — side by side. No signup. No bias.
Side-by-Side Comparison
| Factor | 🚗 Novated | 💳 Loan | 💰 Cash |
|---|---|---|---|
| Monthly cost | — | — | — |
| Total cost (term) | — | — | — |
| Tax impact | Pre-tax savings | Post-tax only | No tax benefit |
| Ownership | Finance co. / employer | You (lender security) | You (outright) |
| Flexibility | Tied to employer | Fully independent | Fully independent |
| Running costs bundled | ✅ Yes | ❌ Separate | ❌ Separate |
- Enter your details above to see personalised insights.
⚠️ Estimated values only. Calculations use simplified formulas and do not account for all individual circumstances, employer arrangements, or legislative changes. Always consult a licensed financial adviser before making financial decisions. Tax rates used are approximate marginal rates only.
Key Differences at a Glance
| Feature | Novated Lease | Car Loan |
|---|---|---|
| Ownership | Employer / finance company | You (or the lender as security) |
| Tax benefit | Pre-tax salary deductions | No tax benefit |
| Running costs bundled | Yes (fuel, rego, insurance) | No — paid separately |
| Flexibility | Tied to employer | Independent |
| End-of-term options | Buy residual / re-lease / return | Own the car outright |
Frequently Asked Questions
Can I own the car after a novated lease?
Yes. At the end of your lease term you can pay the residual (balloon) value and take full ownership, re-lease the same car, upgrade to a new vehicle, or hand the car back.
Does a car loan affect my credit score?
Yes, a car loan appears on your credit file. Timely repayments can improve your score; missed payments will damage it. A novated lease is generally not recorded as personal debt.