Australian Drivers Save Over 50% On Petrol For Life
After the cost of funds, fuel is likely to be the second biggest cost of car ownership. You already know how a novated lease saves you heaps on your car lease, (remember? Lease repayments pre-tax, fleet-owners discount and no GST on the purchase etc etc) but did you know that a fully maintained novated lease will save you even more (proportionally) on your fuel?!
Well first up, you use your fuel card which is regularly topped up via your pre-tax income. Whammo – that’s an immediate saving of up to 47% depending on your marginal tax rate. If you’re earning over $80,000, it’s a 37% saving compared to paying after-tax like so many people do.
Then there’s the built-in savings from the fleet card provided by your novated lease company. These vary but these petrol fleet discounts typically save another quick 2c off the cost per litre. Every little helps – we’ll take it.
Talking of tax, lets scratch off another one. As a driver under a novated lease, you don’t pay the GST – there we go – another 10% saved. How easy was that?
So you save all this money but, of course, to replace it you’re gonna get hit with the dreaded FBT, right? Wrong! Running costs for your car including fuel do not attract FBT. So you get to pocket 100% of the savings.
Let’s look at an example below:
Cost Per Litre $1.40
Fleet Discount $0.02
Discounted Price $1.38
Less GST @ 10% $1.25
Less 37% tax $0.79
So it’s a huge difference in out-of-pocket costs for millions of Australians. The highest paid save even more – well over 50%.
Here’s a great video from our mates at Fincar which explains it another way. If you want to learn more and speak with one of our novated lease experts, make sure you get in touch.