A novated lease, a car loan, and a cash purchase all get you the same car in the driveway. What differs is how much of the true cost — after tax, after GST, after any EV incentives, after what the car is worth when you're done with it — actually leaves your pocket. This worked example runs all three side by side for a Tesla Model Y-class EV on a $180,000 salary, using the same assumptions built into MyNextDollar's novated lease calculator, so you can see exactly where the difference comes from and then run your own numbers.
The Assumptions
This example uses one specific, stated set of inputs. Change any one of them — especially salary, vehicle price, or interest rate — and the comparison moves. The point isn't "this is what everyone gets," it's "here's exactly how the calculator gets from these inputs to these numbers."
- Vehicle: Tesla Model Y-class EV, $80,000 drive-away, new
- Salary: $180,000 gross, Victoria
- Term: 3 years, 20,000 km/year
- Financing: 3-year novated lease vs. an $80,000 cash purchase vs. a car loan with a $20,000 deposit at 6.5% p.a.
- Running costs: insurance, registration, servicing, tyres and charging estimated at roughly $3,800/year (the calculator's default assumptions for a new EV)
- State EV incentive: Victoria's $8,800 zero/low-emission vehicle subsidy, applied per the calculator's current settings
Scenario 1: Cash Purchase
Paying cash means the $80,000 leaves an offset account (or equivalent savings) where it would otherwise have been earning interest or reducing mortgage interest. The calculator treats that foregone benefit as part of the true cost, alongside running costs and what the car is worth at resale.
Over the 3-year term: an estimated total cost of $50,066, or the equivalent of about $1,391/month — the net effect of the upfront outlay, running costs and lost offset-account benefit, less the estimated resale value at the end of the term.
Scenario 2: Car Loan
A car loan spreads the purchase price over the term, but you pay interest on top and still own — and are still responsible for repaying — the full amount you financed.
Over the 3-year term: an estimated total cost of $72,100, or the equivalent of about $2,003/month — the $20,000 deposit, the $60,000 principal, interest at 6.5% p.a., and running costs, less the estimated resale value at the end of the term.
Scenario 3: Novated Lease
The novated lease is paid from pre-tax salary, which is where most of the gap comes from at this income level: the salary sacrifice reduces taxable income (worth more at a $180,000 marginal rate than a lower one), the employer typically claims back GST on the vehicle and running costs, and — because this example vehicle is an EV under the calculator's current FBT-exemption threshold — no fringe benefits tax applies.
Over the 3-year term: an estimated net cost of $1,986 in total (after all tax savings, GST savings, and the state EV rebate are netted against the lease payments), while take-home pay reduces by about $630/month during the lease. That net-cost figure is close to break-even specifically because of the EV FBT exemption stacking with the tax and GST savings — it is not representative of a novated lease on a petrol, hybrid or diesel vehicle, where FBT would typically apply.
Side-by-Side Comparison
| Cash Purchase | Car Loan | Novated Lease | |
|---|---|---|---|
| Total cost over 3 years | $50,066 | $72,100 | $1,986 (net) |
| Monthly equivalent | $1,391 | $2,003 | $630 (take-home pay reduction) |
| Balloon/residual due at end of term | N/A (owned outright) | N/A (owned outright) | ~$36,000 |
| Paid from | Post-tax savings | Post-tax income + interest | Pre-tax salary |
| FBT/GST treatment | None | None | FBT-exempt EV, GST claimed back |
What Changes This Result
This comparison is sensitive to a handful of inputs. Before treating any of these numbers as your own, check how each of these moves the outcome using the calculator directly:
- Salary — the tax saving from salary sacrifice is worth more at higher marginal tax rates. The same car on a $90,000 salary shows a meaningfully smaller gap between the lease and the other two options.
- Vehicle type — the FBT exemption in this example applies because it's an EV under the calculator's current price threshold. A petrol or hybrid vehicle at the same price would show FBT applying to the lease, closing most of the gap.
- Interest rate — the car loan scenario is the most sensitive to this. A lower personal loan rate narrows the gap to cash; a higher one widens it.
- Kilometres driven — charging/fuel costs, servicing intervals and residual value assumptions all move with annual kilometres.
- Lease fees and vehicle price — a higher vehicle price increases the GST saving (up to the calculator's cap) and the potential tax saving, but also increases the absolute size of the balloon payment.
- State — the EV rebate used here ($8,800) is Victoria's; other states offer less or none, which directly changes the novated lease net-cost figure.
What This Isn't
This is a general, calculator-based worked example, not personal financial or credit advice, and not a recommendation of any specific lease, loan or provider. A novated lease is a financing and salary-packaging arrangement — the right choice depends on your own income, job stability, how long you'll keep the car, and your state's rules, not just the total-cost figure above. If you're weighing this decision, running your own numbers through the calculator and, for anything involving a specific credit contract, checking the terms with the actual lender or lease provider is the more reliable path than any general example.