Lease vs Buy Calculator
Should you lease or buy your next car? Compare total costs including loan interest, depreciation, running costs, and potential tax savings from novated leasing.
Vehicle Details
Buy with Loan
Novated/Operating Lease
Annual Running Costs
Recommendation
Buy the Vehicle
Save approximately $3,525 over the comparison period
Cost Comparison
Buy Total Cost
$76,691
Over 5 years
Lease Total Cost
$37,560
Over 3 years
Average Monthly Cost
Buy
$1,278/mo
Lease
$1,043/mo
Buy Breakdown
Lease Breakdown
Leasing vs Buying: Key Differences
Buying a Car
- + You own the asset at end of loan
- + No km limits or excess fees
- + Can modify or sell anytime
- - Higher monthly payments
- - You bear depreciation risk
Leasing a Car
- + Lower monthly payments
- + Always drive a new car
- + Tax benefits (novated lease)
- - Km limits apply
- - No equity - paying for use only
Novated Lease Explained
A novated lease is a salary packaging arrangement that can save money through:
Pre-Tax
Payments from gross salary
GST Savings
No GST on vehicle purchase
Bulk Discounts
Fleet pricing on fuel, insurance
Novated Lease Tax Savings Example
Example for $45,000 vehicle, employee earning $100,000/year:
| Cost Component | Buy (Loan) | Novated Lease | Savings |
|---|---|---|---|
| Vehicle Price (ex GST) | $45,000 | $40,909 | $4,091 |
| Pre-Tax Benefit (30% rate) | $0 | ~$3,900/yr | ~$11,700 |
| Running Cost Savings | $0 | ~$500/yr | ~$1,500 |
| Total Savings (3 years) | - | - | ~$17,000 |
* Actual savings vary based on income, vehicle, and running costs. FBT may apply.
When to Buy vs When to Lease
Buy If You...
- • Plan to keep the car 5+ years
- • Drive high kilometres (30k+ per year)
- • Want to modify the vehicle
- • Prefer full ownership
- • Have savings for a deposit
- • Are self-employed or can't salary package
Lease If You...
- • Want a new car every 2-4 years
- • Drive under 25,000km per year
- • Can access salary packaging
- • Are in a high tax bracket (30%+)
- • Prefer predictable monthly costs
- • Don't want to worry about resale
Fringe Benefits Tax (FBT) on Novated Leases
Important: Novated leases attract Fringe Benefits Tax (FBT) which can reduce savings. The Employee Contribution Method (ECM) minimizes FBT by having you contribute post-tax income to cover the FBT.
Always get a quote from a novated lease provider showing your actual out-of-pocket costs after FBT.