Two novated lease quotes can produce different fortnightly “cost to you” figures even when the underlying finance rate is not the main reason. Before choosing the lower headline deduction, put the quotes on the same basis.
Step 1: Match the vehicle transaction
Check that both quotes use the same:
- vehicle and specification;
- purchase price;
- accessories;
- on-road costs;
- delivery assumptions.
A better vehicle discount can be valuable, but it is different from a better finance rate.
Step 2: Reconcile the finance principal
Find the exact amount financed. Check GST adjustments, establishment fees, PPSR and any other financed amounts.
If the nominal rate is not clear, use the Novated Lease Interest Rate Calculator to reverse-engineer the rate from the contractual rental schedule.
Step 3: Match term, residual and timing
Both quotes should be compared using the same nominal term and an equivalent residual basis. Also compare the actual rental count and first-payment timing. A 36-month quote with 34 monthly finance rentals is not mathematically identical to one with 36 end-of-month rentals.
Step 4: Separate fees from budgets
Create two columns:
Provider / finance costs
- finance interest;
- establishment fees;
- PPSR;
- packaging administration;
- other actual charges.
Operating-cost budgets
- fuel/charging;
- tyres;
- servicing;
- registration;
- insurance where budgeted.
A larger tyre or servicing budget is not automatically a more expensive provider if unused budget is reconciled under the provider's process. Ask how each budget works.
Step 5: Compare end-of-term and change-of-employer terms
Read the early-termination/de-novation provisions and what happens if you change jobs. See What Happens to a Novated Lease If You Change Jobs?.
Step 6: Compare BYO/self-managed flexibility
If your employer's program permits it, you may be able to compare separately sourced finance while keeping the approved salary packaging administrator. Read Can You Bring Your Own Finance to a Novated Lease?.
Quote comparison worksheet
For each quote, write down:
| Item | Quote A | Quote B |
|---|---|---|
| Vehicle purchase price | ||
| Amount financed | ||
| Nominal term | ||
| Residual incl. GST | ||
| Finance-rental count | ||
| Contractual rental | ||
| Implied / stated nominal rate | ||
| Establishment + PPSR | ||
| Packaging administration | ||
| Running-cost budgets |
Only after that should you compare take-home-pay estimates.
Need a second opinion? Run the finance numbers and compare lease options.
About the author: KK Neelamraju is a finance and credit professional and founder of GPS Finance Group.
General information only. Finance approval and pricing are subject to lender assessment. Tax-sensitive information should be checked against current ATO guidance and, where appropriate, with a qualified tax adviser.
Frequently asked questions
What should I normalise before comparing novated lease quotes?
Use the same vehicle price, financed amount, term, residual basis, rental count and timing. Then compare administration fees, running-cost budgets and tax assumptions separately.
Should I choose the quote with the lowest payroll deduction?
Not by itself. Payroll deduction can reflect different budgets, tax assumptions and administration costs as well as the underlying finance.
What is the best finance number to compare?
Compare the actual financed amount, contractual rentals, residual and fees. Those inputs let you assess the underlying finance cost separately from salary-packaging budgets.
Sources and verification
- Australian Taxation Office — Car leasing and FBT
- Australian Taxation Office — Minimum residual values for leased cars
These sources support the general framework above. Lender-specific policy, pricing, limits and turnaround times can change and should be checked before a formal application.
Related GPS Finance resources
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Send the quote context and we can review the finance rate, residual, fees and whether a BYO or self-managed finance path is worth exploring.
