The honest three-way comparison for Australia. Same car, same years, same end point — you own it — with income tax, FBT, the EV exemption, GST and your state's stamp duty done properly, and what your money would have earned invested counted for every method, not just cash.
Hand over the full price plus stamp duty on day one and the car is yours. No interest, no fees — but that lump sum stops earning whatever it was earning in your offset, savings or portfolio, and that quiet cost is real money over five years.
A secured loan spreads the cost into monthly repayments — typically around 6–9% p.a. in mid-2026 for good credit. You pay interest and fees, but your savings stay invested and keep compounding while the balance amortises.
Your employer pays the lease and running costs from your salary — mostly pre-tax — and the financier claims the GST on the car. You save income tax and GST, but pay a higher finance rate, admin fees, and a residual (plus GST) at the end to own the car. For eligible EVs the whole package is FBT-exempt and pre-tax, which is why they often win by five figures.
A three-way deal between you, your employer and a financier. The employer takes over ("novates") your lease obligations and pays the car and its budgeted running costs out of your salary — mostly before tax. If you change jobs, the lease un-novates and either moves to your new employer or reverts to you as a normal lease.
Battery EVs under the luxury-car-tax fuel-efficient threshold ($91,661 for 2026-27, measured at first retail sale) are exempt from fringe benefits tax. That means the entire package — finance and running costs — comes out of pre-tax salary with no post-tax offset required. Plug-in hybrids lost this exemption on 1 April 2025. Note the benefit is still reportable (RFBA), which can affect things like HELP repayments and the Medicare levy surcharge, though not your income tax.
The ATO sets minimum residual values so a lease is genuinely a lease — for example 28.13% of the financed amount on a 5-year term. When the term ends you pay the residual plus 10% GST to own the car, refinance it, or sell/trade the car and keep anything above the residual, tax-free.
Because a dollar spent today costs more than a dollar spent in year five. If you pay cash, your lump sum stops earning from day one. If you finance, each repayment stops earning only when it leaves your account. We future-value every outflow at your after-tax return — mortgage-offset money is tax-free, savings interest is taxed at your marginal rate, share returns roughly half — so all three methods are treated identically. Untick the option to see plain cash totals instead.
Yes — the pre-tax deductions save tax at your marginal rate, so someone on $200k (45% + 2% Medicare) saves more per packaged dollar than someone on $70k (30% + 2%). The calculator computes the exact tax difference at your salary, including bracket crossings.
Mostly. Stamp duty, loan and running-cost maths work the same. Two caveats: our default resale curve assumes a new car (set your own resale value under Advanced), and novated leases on older cars are restricted — most financiers require the car to be under ~12-15 years old at the end of the term.
ATO published rates for FY 2026-27 (income tax, FBT, LCT, car limit, lease residuals), state revenue offices for stamp duty, and market averages current at July 2026 for loan and lease rates, insurance and running costs. Every source is linked in the methodology panel above, and every assumption is editable.
No — it's general information calculated from published rates and your inputs. It doesn't consider your objectives, financial situation or needs. Novated lease quotes vary widely between providers, so always compare a real quote, and consider licensed advice before committing.