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Novated lease
vs personal finance

Toyota Kluger comparison

Novated lease vs personal finance

Save $12,729 on a Toyota Kluger

To demonstrate how much cheaper a novated lease is, we’ve compared it against personal finance, and  ‘generously’ assumed the individual using personal finance has received the same discount on purchase price, although that’s rarely the case.

Salary & vehicle

Salary

$100,000 + super

Car allowance

$0

Vehicle

2016 Toyota Kluger GXL 7st 3.5i

On road cost

$54,115

Annual kilometres

12,000kms p/a

Usage

No business use

Term

3 year lease

Annual running costs

Finance payments

$13,870

Fuel

$2,487

Servicing

$667

Tyres

$381

Registration & CTP

$1,032

Insurance

$1,400

Total gross cost

$19,838

So the total cost of running the Kluger for a year is $19,838. Although you would receive discounts on your running costs thanks to our buying power, we’ll assume for now that the costs are the same, whether you use a novated lease or personal finance. That way the savings outlined below are purely thanks to the tax effectiveness of a novated lease.

Payroll treatment Personal finance Novated lease

Gross salary

$109,500

$109,500

Salary sacrifice

$0

-$8,659

Superannuation

-$9,500

-$9,500

Taxable income

$100,000

$91,341

Income tax

-$26,947

-$23,570

Employee contribution

$0

-$10,313

Take home pay

$73,053

$57,458

Running costs

-$19,838

$0

Disposable income

$53,215

$57,458

Annual saving

$4,243

3 year saving

$12,729

You can see above, as you sacrifice part of your salary with a novated lease, your income tax reduces. And even though your take home pay is lower, you’ve already paid for the car, so you’re actually better off to the tune of $4,243 a year, which is a massive saving of $12,729 over the term of the lease.

It might seem a little confusing to begin with, but we’ll talk you through it. And we can assure you, it becomes a lot clearer when you see how much your own income tax will reduce by, and how much you’ll save overall.

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