This is a guest post. But not from the masses of emails I get from people reaching out to me to write about their products or services or to add backlinks to their websites (which all go in the bin – don’t send me this crap please).
In this case, I reached out to the author myself because the information they have provided over the years on novated leasing has been exceptional, and without wanting anything in return other than to help others.
When I saw that they laid it out very clearly on a website and articulated it in a way that is easy to understand, I wanted people to be aware of it as a way to avoid getting taken advantage of (much like the reason why I created this website).
So, without a long(er) unnecessary intro from me, I’ll let changyang1230 (reddit username) explain novated leasing and the many gotchas in an area where almost all the ‘information’ (using the word loosely) available is biased and misleading because it comes from product providers.
Why Most Novated Lease Advice is Wrong (and What I Did About It)
Guest post by changyang1230 from novatedlease.guide
You’ve probably heard some versions of these rules of thumb:
- Novated leasing is a scam
- Most of the benefit goes to leasing companies
- You should never finance a depreciating asset
- It’s only worth it if you’re on the top tax bracket and drive a lot
For most people, these heuristics were largely correct. The problem is that people started treating them as permanent axioms and stopped re-examining them when the underlying rules changed.
The 2022 FBT exemption for eligible EVs was exactly that kind of change.
Why the site exists
After sharing my analysis (further details below) on Reddit (r/AusFinance and elsewhere), I realised two things were happening simultaneously:
- Many people were dismissing EV novated leases for the wrong reasons: applying outdated heuristics without realising the significant additional savings.
- Many people were entering novated leases for the wrong reasons: trusting calculator results that overstated the benefits, while remaining in the dark about the risks and how to manage them.
That second problem turned out to be the bigger one. I reviewed the top 20 Google results for “novated lease calculator.” Nearly all of them were run by leasing companies or lead-generation sites. And most display a “tax savings” figure that conflates gross tax reduction with actual net savings, while ignoring the extra cost of the lease itself. In a real example I examined, a marketed “$21,320 tax saving” could in fact be a net loss of $5,591 when compared to a cash purchase.
It’s the core mechanism of how these calculators mislead people. Unfortunately, novated leasing escapes both the Corporations Act 2001 and National Consumer Credit Protection Act 2009, such that things that we take for granted for other products, e.g. Product Disclosure Statement (PDS) and standardised comparison rates simply don’t apply. Many salary packaging and novated leasing providers take full advantage of that regulatory gap in their consumer-facing marketing.
What the site actually does
Novated Lease Guide & Calculator exists to fill that gap. It’s independent i.e. no commission arrangements, no leasing company affiliations, and no ads. All I get is voluntary tipping and referral from people who saw value in my content.
If a novated lease is genuinely right for you, this site will help you understand why, and how to negotiate confidently. If it isn’t right for you, this site will help you understand that too before you sign anything.
The goal here is simple: to explain how novated leases actually work, where the benefits really come from, where the risks are, and who should or should not consider them.
The site covers:
- A transparent novated lease calculator showing real net financial outcome rather than an incomplete and misleading “tax saving” figure.
- What a novated lease actually is, mechanically
- Why “tax saved” is the wrong metric (and what the right one is)
- Frank discussion on caveats of novated leasing: early termination payouts, impact on childcare subsidy / HECS / Div293, impact on superannuation.
- Special cases: FBT-exempt employers and NSW Health’s “Employer Share” trap.
Who I am
By day, I’m an anaesthetist. By background, I’m someone with a competitive mathematics history and a qualification in biostatistics. This means I’m professionally trained to think not just about expected outcomes, but about distributions, edge cases, and downside risks. That framework shapes everything on how I think about novated lease.
This is how I became “that novated lease guy” on forums.
How I fell down the rabbit hole
In early 2023, I learned about the new FBT exemption for EVs. Up to that point, every time I’d run numbers on a novated lease for an ICE vehicle, it hadn’t stacked up. But the FBT exemption looked genuinely different.
So I did what I do best: I built a spreadsheet. Then another. Then a more refined one. After peer review by other finance-minded people, the conclusions were startling.
For my personal circumstances (top marginal tax bracket, have a home loan offset), when comparing “buying an EV outright with cash” vs. “the same car via an FBT-exempt novated lease”, the novated lease option was approximately $46,000 cheaper over five years. Not a typo.
Even more surprising: switching from my perfectly good $25k Mazda 6 to an $81k Tesla was, over five years, roughly neutral to my overall net worth.
I double-checked. I had others scrutinise it. The conclusion held.
Why I do this
I have been a lucky person in life – a decent intellect, a good job and a happy family. I’ve always enjoyed helping people online, and I have a strong sense of justice when it comes to people being taken advantage of by those with an agenda. Over the years, I’ve spent hundreds of hours on forums answering questions from strangers, often addressing detailed, specific questions that would have cost them real money to get wrong.
My life and skillset turned out to be a fortunate combination. I enjoyed solving a complex maths problem and sharing the result with the world, with the hope that it could help people save tens of thousands of dollars. And because my day job pays the bills, I don’t need to compromise the site with kickbacks or affiliate arrangements; I treat it as charity work using whatever skills I happen to have.
If it’s helped you avoid a bad deal or feel confident about a good one, that’s enough for me. The few people who saw enough value to buy me a coffee give me far more satisfaction than its monetary value.
On a closing note, one site that shaped this ambition was PassiveInvestingAustralia which I read cover to cover when I was learning about personal finance more seriously. What struck me was the combination of genuine expertise and zero agenda. The author had no products to sell and no commissions to chase. That combination of expertise and independence was rare, and it left an impression. When I set out to build novatedlease.guide, that was the standard I had in mind, and it was truly a humbling moment when Eli reached out for this guest post – thank you.