Are you thinking about getting a new car but unsure how to finance it? Or maybe instead of buying it outright you want to see if there is a way to save your cash for something else? If you’re an Australian employee looking for a cost-effective way to get behind the wheel, a novated lease could be the solution you’ve been searching for. Not only does it provide flexibility, but it also offers significant tax savings that make your next car more affordable.  The best way to estimate how much you can save is by using our novated lease calculator. In this guide, we’ll explain how a novated lease works, what kind of savings you can expect, and how our calculator helps you make an informed decision about your next vehicle.  What is a Novated Lease?  A novated lease is a type of salary packaging arrangement where your employer pays for your car lease using your pre-tax income. This reduces your taxable income, which could result in you paying less tax throughout the year. In simple terms, it’s a three-way agreement between you, your employer, and the leasing company.  Here’s how a novated lease works:  - You choose your car: Whether it’s a brand-new vehicle or a used one, you get to pick the car that suits your needs.  - Lease payments come from pre-tax income: Your employer makes the lease payments directly from your salary before tax, lowering your taxable income.  - Bundled car expenses: Fuel, insurance, maintenance, and registration can all be included in your lease, meaning one simple payment covers all your car-related costs.   This setup is particularly beneficial because it provides substantial savings and removes the headache of dealing with multiple car-related expenses.  How Much Can You Save with a Novated Lease?  One of the biggest draws of a novated lease is the tax savings. Because the lease payments are deducted from your pre-tax income, your taxable salary is reduced, meaning you could be paying less tax overall.  The actual amount you can save depends on several factors:  - Your salary: Middle to higher income earners typically see greater tax savings with a novated lease.  - The car you choose: The price of the vehicle, running costs, and how long you lease it for will all influence your overall savings.  - Lease term: The length of your lease (usually between two and five years) will also impact your total savings.  What Expenses Are Covered in a Novated Lease?  When you lease a car through a novated lease, you’re not just covering the cost of the car itself. Many of the everyday expenses of car ownership can be bundled into your regular payments, saving you time and stress. These can include:  - Fuel or electricity (for EVs): Keep your car running without worrying about fluctuating fuel prices.  - Insurance: Comprehensive car insurance costs can be part of your regular pre-tax payment.  - Maintenance: Regular servicing and repairs are covered, so you won’t need to deal with unexpected repair bills.  - Registration: Your car’s registration can also be part of the package, saving you an annual hassle.  By bundling all these costs into one regular payment, you can simplify your budget and enjoy the peace of mind that comes from knowing your car expenses are taken care of.  Some novated leasing providers also allow you to do a non-maintained novated lease. If you just want the car and prefer to look after the running costs yourself this can often be accommodated. This arrangement is almost always cheaper than normal car finance because you don’t pay GST for the car and your lease payments come out of your pre-tax salary which reduces your taxable income.   Why Use a Novated Lease Calculator?  A novated lease calculator helps you estimate the potential savings from salary packaging your car. Our CarBon calculator allows you to enter details like your salary, the vehicle you’re interested in, and the lease term. From there, the calculator shows you the tax savings, the cost of the lease, and how much you’ll save over the term of the agreement.  Using a novated lease savings calculator gives you a clear picture of the financial benefits of novated leasing before you make a decision. It can help you compare different vehicles, lease terms, and overall costs to find the best option for your situation.   How to Use Our Novated Lease Calculator  Here’s how easy it is to use the CarBon novated lease calculator to see how much you can save: 
  1. Enter your annual salary: Input your gross income to calculate how much you can save on tax.
  2. Choose your car: Pick the car you’re interested in leasing. You can select from popular models, including Toyota, Tesla, Ford, and more.
  3. Select your lease term: Decide how long you want the lease to last—most leases run between 2 to 5 years.
Once you’ve entered this information, the calculator will show you:  - Weekly or monthly payments: How much you’ll be paying regularly under the lease.  - Tax savings: A breakdown of how much you’ll save based on your salary and the car’s costs.  - Total cost: The overall cost of the lease, including any residual value if you choose to buy the car at the end of the lease.  How a Novated Lease Compares to Buying Outright  Many people wonder whether leasing or buying a car outright is a better financial decision. Let’s break down the differences between novated leasing and buying outright.  - Upfront costs: With a novated lease, you typically don’t have to make a large upfront payment or deposit. In contrast, buying a car outright requires you to pay the full purchase price upfront, which can strain your cash flow.  - Tax benefits: With a novated lease, you get the advantage of tax savings by paying for the lease with your pre-tax salary. When you buy a car outright, you don’t get these tax benefits. You also don’t pay GST on the purchase of the vehicle and the ongoing running costs when you get a novated lease. All of this results in significant savings that wouldn’t be available to you if you chose to purchase the vehicle outright.  - Flexibility: Novated leases offer flexibility. At the end of the lease, you can choose to buy the car for its residual value, extend the lease, or sell the vehicle and lease a new one.   Using a novated lease calculator will help you weigh these factors and decide which option is best for your financial situation.  Conclusion: How Much Can You Save with a Novated Lease?  With a novated lease, you can significantly reduce the cost of owning a vehicle through tax savings and bundled car expenses. It’s an attractive option for many Australian drivers, particularly those who want flexibility and financial benefits.  Ready to see how much you could save? Use the CarBon novated lease calculator today to estimate your potential savings and find out if a novated lease is the right choice for you. Whether you’re eyeing a Toyota, Tesla, or another vehicle, our calculator will help you make an informed decision that could save you thousands over the life of the lease.