Is Fuel Included in a Novated Lease?
Yes, fuel can be included in a novated lease, making it easier to manage your vehicle’s running costs. Here’s how fuel costs work within a typical novated lease arrangement:
1. Fuel Cards
Many novated lease providers offer a fuel card as part of the lease package. This card allows you to purchase fuel using your pre-tax income, which reduces your taxable salary. You can use the card at a wide range of service stations across Australia, making it convenient for daily use and helping you save on fuel expenses.
2. Salary Packaging for Fuel
Fuel expenses can be salary packaged, which means the cost of fuel is deducted from your pre-tax income. This setup offers several financial benefits. You reduce your taxable income, resulting in potential tax savings based on your income bracket. This makes salary packaging fuel a smart way to lower the overall cost of driving.
3. Budgeting for Fuel
When setting up a novated lease, your provider will typically estimate your annual fuel costs based on your expected driving distance. These estimated costs are then spread out and deducted from your salary regularly. This allows for consistent budgeting without the worry of unexpected fuel expenses.
4. Reimbursement for Fuel
If you happen to purchase fuel without using the provided fuel card, you can usually submit your receipts to the novated lease provider for reimbursement. This ensures that you aren’t left out of pocket for fuel expenses, even if you don’t have the fuel card handy at the time.
5. Comprehensive Coverage
In addition to fuel, a novated lease can cover other running costs like insurance, registration, servicing, and maintenance, all paid from pre-tax income. This makes it a highly cost-effective solution for managing all vehicle expenses.
In summary, fuel is commonly included in a novated lease through a fuel card or salary packaging, allowing you to pay for fuel with pre-tax income and enjoy the convenience of structured payments. The result is an overall reduction in your vehicle operating costs and smoother financial management.
Curious about how much you could save on fuel and other car expenses with a novated lease? Contact us today to explore your options and start saving!