Novated Leasing: Real World Examples
Novated leasing, also known as salary packaging a car, is a unique financial product that differs from traditional car loans.
And as one of Australia’s largest and most experienced novated leasing providers, Maxxia understands that employees want more than just definitions - they want to see how novated leasing works in real world situations and how the benefits apply to them personally.
That’s why we’ve created this document - to answer our most frequently asked questions and walk through common, real life scenarios, helping employees better understand their options and feel confident that novated leasing could be a practical and beneficial choice.
Real world examples
Interest Rate Isn’t the Whole Story
Employee Question:
I got a novated lease quote through Maxxia, but the interest rate seems higher than what my bank offers. Is it still worth considering?
Scenario:
Emma, earning $85,000, compared her Maxxia novated lease quote with a bank car loan. The bank’s interest rate looked lower, so she initially assumed it was the better deal.
What Happened:
Emma focused only on the interest rate and didn’t factor in the broader benefits of novated leasing.
Maxxia’s Clarification:
Her consultant explained that:
- Novated leasing can reduce taxable income, potentially resulting in tax savings
- Novated leasing could offer GST savings on the car price and running costs
- Fleet discounts and our maintenance team could reduce overall costs
- Running costs like insurance, tyres, registration, fuel and maintenance are bundled together and covered in each pay cycle
Outcome:
Emma chose a novated lease. While the interest rate was higher, the overall value, including convenience and potential savings, made it the better option for her.
Credit Score Worries
Employee Question:
I’ve had some credit issues in the past. Will that affect my ability to get a novated lease?
Scenario:
James, earning $70,000, assumed his credit history would prevent him from qualifying for a novated lease.
What Happened:
He thought novated leases were assessed like personal loans, where credit score plays a major role.
Maxxia’s Clarification:
Maxxia works with financiers who offer a fixed base rate to all eligible employees. This structure may reduce the impact of personal credit history.
Outcome:
James’ lease application was assessed and approved through Maxxia’s streamlined process, securing a novated lease which offers fixed repayments. He benefited from bundled services and potential tax savings.
Ownership vs Leasing
Employee Question:
I usually buy my cars outright. What happens at the end of a novated lease?
Scenario:
Priya, earning $120,000, was unsure about leasing and worried she’d be forced to buy the car.
What Happened:
She misunderstood how the residual value works in a novated lease.
Maxxia’s Clarification:
Her consultant explained:
- The residual value is pre-agreed and built into the lease
- At lease end, Priya can choose to upgrade, refinance, or purchase the car, it’s up to her
- Maxxia provides support throughout the lease lifecycle
Outcome:
Priya opted for a novated lease and with the support of Maxxia, chose the option best suited to her needs at end-of-lease time.
Underestimating Convenience
Employee Question:
Isn’t novated leasing more complicated than just getting a car loan?
Scenario:
Alex, earning $95,000, was considering a car loan and didn’t realise how convenient novated leasing could be.
What Happened:
He assumed novated leasing would be harder to manage and more complex.
Maxxia’s Clarification:
Maxxia showed Alex how novated leasing simplifies car ownership:
- No upfront out-of-pocket costs, with first payment deferred for two months
- Annual running costs (including fuel, servicing, tyres, insurance, rego) are bundled into one payroll deduction
- Maxxia’s app provides real-time balances, easy claiming, and the flexibility to adjust your budget
Outcome:
Alex chose a novated lease, providing him with bundled services and consistent repayments, and car-management convenience as well as potential tax-saving opportunities he may not have received with a regular loan.
Budget Flexibility in Action
Employee Question:
What happens if my running costs change during the lease?
Scenario:
Sarah, earning $90,000, noticed her fuel costs were higher than expected due to a longer commute.
What Happened:
She was concerned about exceeding her budget and having to pay out-of-pocket costs.
Maxxia’s Clarification:
The Customer Care consultant explained that Maxxia’s app allows real-time tracking and budget adjustments. They revised her lease budget to reflect her new usage.
Outcome:
Sarah avoided a shortfall and maintained her lease benefits with a revised budget that suited her lifestyle.
EV Leasing Without Home Charging
Employee Question:
Can I lease an EV if I don’t have a home charger?
Scenario:
Tom, living in an apartment, wanted to lease an EV but didn’t have access to a home- charging station.
What Happened:
He was unsure if EV leasing would be practical without home-charging infrastructure.
Maxxia’s Clarification:
His consultant helped him choose an EV, outlined where he could access stations and mapped nearby stations. They also discussed charging options at his workplace.
Outcome:
Tom leased an EV and uses public chargers conveniently, enjoying 100% pre-tax payments thanks to the Government’s EV Discount, as well as lower overall running costs.
Leasing on an Entry-Level Salary
Employee Question:
Is novated leasing suitable for someone on a lower income?
Scenario:
Mia, earning $65,000, was unsure if novated leasing was financially viable for her.
What Happened:
She assumed the benefits were only for higher earners.
Maxxia’s Clarification:
Her consultant provided a quote showing potential tax savings and simplified budgeting. They tailored the lease to her salary and vehicle preferences.
Outcome:
Mia chose a vehicle aligned to her needs and benefited from pre-tax payments, bundled services and consistent repayments, making car ownership more manageable.
Things you need to know:This general information doesn't take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax and financial advice. Conditions and fees apply, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your employer’s approval. Maxxia may pay and/or receive commissions in connection with its services.
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