Hindsight is 20/20: 3 things we wish every first-timer knew before signing

1. Don't overestimate your annual kilometres

When setting up your lease, we ask you to estimate how many kilometres you expect to drive each year (e.g., 10,000 km, 15,000 km, or 20,000 km). This figure is used to calculate how much money we need to set aside from your salary for fuel or charging, servicing, and tyres.

A common mistake first-timers make is wildly overestimating their driving distance “just to be safe.”

While it is good to have a buffer, setting your kilometres at 25,000 km when you only drive 10,000 km means we will be deducting far more money from your weekly pay than you actually need to spend. It is much better to be realistic. If your circumstances change and you start driving more, you can simply contact us to adjust your budget mid-lease.

2. Your running costs are not 'use it or lose it'

This is the biggest source of confusion for new drivers. When you bundle your running costs into your lease, that money goes into a dedicated account used to pay your fuel, insurance, and maintenance bills.

Many people mistakenly believe that if they don't spend their entire tyre or servicing allowance by the end of the year, the finance company keeps the money. This is entirely false.

Those funds are your money. If you reach the end of your lease term (or the end of the financial year) and you have a surplus in your running cost account because you didn't drive as much as expected, that unspent money is reconciled and returned to you through your employer's payroll. It will be taxed at your standard income tax rate at that point, but you never lose the money.

3. You don't have to be a road warrior to save money

Years ago, the FBT rules were scaled so that the more kilometres you drove, the less tax you paid. Because of this old rule, a myth still lingers that a novated lease is only beneficial for sales reps or people who commute hours every day.

Today, the Australian Taxation Office (ATO) applies a flat 20% statutory fraction rate for FBT, regardless of how far you drive. Whether you do 5,000 km a year just doing the school run and going to the supermarket, or 40,000 km travelling interstate, the financial mechanics remain the same.

Plus, if you choose an eligible fully electric vehicle (EV) that falls under the FBT exemption, you pay zero FBT anyway. Don't let a short daily commute talk you out of looking into the tax savings.