A good novated lease comparison starts by asking for the numbers that let you reconstruct the transaction. Use this checklist before relying on a headline fortnightly saving.
Finance questions
1. What is the exact amount financed?
Use the finance principal, not just the drive-away price.
2. What is the nominal annual finance rate?
If the rate is not clear, ask for it or calculate the implied rate from the cash flows.
3. How many contractual finance rentals are there?
Do not assume the count is identical to the nominal month count.
4. When is the first finance rental due?
Timing affects the present value and reverse-rate calculation.
5. What is the residual including GST?
Also ask how the finance schedule treats the residual excluding GST.
6. What establishment and PPSR charges are financed?
Financed fees increase the principal.
Salary packaging questions
7. What administration fee applies?
Separate packaging administration from finance interest.
8. Which running-cost numbers are budgets?
Ask what happens to under- or overspend.
9. Can I choose my own insurer?
Provider rules differ.
10. Can I source the vehicle myself?
A separately negotiated vehicle price can be an important part of the total comparison.
Flexibility questions
11. Can I source the finance separately?
Ask specifically about third-party/BYO finance.
12. Does my employer permit a self-managed arrangement?
The employer and administrator need to support the process.
13. What happens if I change employers?
Understand de-novation and re-novation steps.
14. How is early termination calculated?
Request the contractual method, not an informal estimate.
15. What happens at the end of the lease?
Understand the residual process and available contractual options.
Put the answers in one place
Once you have the finance principal, rentals and residual, use the GPS Novated Lease Calculator. Then compare the broader package with How to Compare Two Novated Lease Quotes Properly.
About the author: KK Neelamraju is a finance and credit professional and an Authorised Credit Representative through GPS Finance Group.
GPS Finance Group (CRN 000575797) is an Authorised Credit Representative of AFAS Group Pty Ltd (ACL 414426). AFCA Member ID 119860. General information only. Credit 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.
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