How Australians Could Save $1,145 on Fuel with a Novated Lease

A woman smiling looking paperwork for salary packaging

As fuel prices climb and global uncertainty weighs on energy markets, Australian households are once again bearing the brunt of the bowser.

But while fuel prices may be outside your control, there are ways to make things more manageable and potentially reduce what you pay overall.

One such way is through a novated lease. Also known as salary packaging a car, a novated lease can help lower the cost of running a car – including what you spend on fuel by an average of $1,145 each year*.

By salary packaging fuel costs as part of your novated lease, you could benefit from GST and tax savings that aren't available with other forms of car finance.

How does a novated lease reduce fuel costs?

A popular aspect of novated leasing is that fuel and many other annual running costs can be included in your lease budget, spread out in regular payments across the year.
Rather than using your take-home pay to cover these expenses, you can use a combination of before- and after-tax income. This could deliver:

Tax savings
GST savings
Smoother budgeting

With novated leasing, you still pay for the fuel you use. The difference is that some of that fuel money comes from salary before you get taxed, which could leave you better off overall.

How much could you save on fuel with a novated lease?

Let's say you earn $90,000, spend $3,000 each year on fuel, and lease a car over five years. You could save an estimated $1,145 a year in tax on fuel by including fuel costs in a novated lease.*

Without a novated lease

With a novated lease

Fuel paid entirely from take-home pay

Fuel paid with before- and after-tax dollars

No GST savings

Potential GST savings on fuel costs

No tax savings

Potential tax savings

Annual fuel spend: $3,000

Total fuel savings: $0

Annual fuel spend: $3,000

^{*$1,145 estimated annual tax saving is illustrative only and based on a salary of $90,000, a 5-year novated lease and $3,000 annual fuel spend. Actual savings will vary based on individual circumstances. This information is general in nature and does not constitute financial or tax advice.}

What else does a novated lease include?

In addition to fuel, a novated lease can help you budget for a range of running costs, including:

Lease repayments
Registration
Comprehensive car insurance
Servicing and maintenance
Tyres
Roadside assistance
Charging for eligible electric vehicles

Bundling and paying for these costs across the year can help make budgeting easier, meaning there’s no bill shock when items like rego and servicing become due.

Is a novated lease worth it?

A novated lease is about more than just getting into your next car.

It can help make everyday car ownership easier to manage through potential tax and GST savings, simpler budgeting and access to competitive pricing on Australia’s favourite makes and models through Maxxia's nationwide dealer network.

When every dollar counts, those savings can really add up over time.

Looking for more ways to save on fuel?

While novated leasing could help you save at the pump, it also pays to shop around for the best fuel prices.

Government-backed fuel monitoring apps and fuel price comparison tools can help you find cheaper fuel in your area and avoid paying more than you need to when filling up.

Read our guide: Finding cheap fuel in Australia: How government apps help you save at the bowser