Our Novated Lease is finished after 5 years; final thoughts

After 5 years, the novated lease contract that we had with my employer and Toyota Fleet Management is finished, and we’ve chosen to keep the vehicle, pay the balloon out and part ways. I’m actually glad that its over, and in this post want to share some parting thoughts that should help you making decisions going forward.

Novated leases really depend on your personal circumstances, and this is just my experience. Please don’t take it as financial advice. If you haven’t already, please check out the original post I wrote on getting a 4WD on a Novated lease, which covers the critical things you should think about before getting one.

If you want to know exactly how much money we spent over the 5 years of owning the Dmax, you can read that here – Isuzu Dmax 5 year total cost.

Why are we glad the Novated Lease is over?

We get full control over the vehicle again

For me, the biggest issue with a Novated Lease is having a third party involved. I dropped our vehicle off at Isuzu for a service recently, and received a phone call the next morning stating they couldn’t start work until they had approval from Toyota Fleet to do so. I said just start work; if they don’t pay, I will.

I got a phone call a few hours later saying Toyota Fleet won’t cover any of the work, including the 100k service. I rang Toyota Fleet Management, who said yep, your account is in deficit because you’ve spent too much on fuel and maintenance, and we won’t be covering it. They gave options to have the money reimbursed once a variation to the contract was done, but its just a whole heap of extra paperwork and stuffing around.

Novated Leases are set up for people who are in a simple situation. The moment you want to add accessories, or change insurance companies, or get additional servicing done everything goes out of the window and you have to dance your way through the experience.

Our Dmax fuel economy was much higher than what was budgeted for, because the estimation was done on 8L/100km. With our modifications we are lucky to see 10L/100km and if we are towing, its 13 – 15L/100km.

I also maintain my vehicles to a high standard, and expect fuel filters to be replaced often (and we have an aftermarket one too), along with servicing of the transmission fluid more regularly because its towing etc etc. Novated leases are not set up to handle this easily, and it became quite the bug bear for me.

Going forward, we ditch the third party. If I want work done on the vehicle I organise it, deal with them only and pay them, and that’s it. There’s no approval from a third party vendor, dealing with silly politics and getting frustrated with what goes on behind the scenes.

The payments each fortnight stop

There’s a lot of benefits to a Novated lease, and having a new (or near new) vehicle is one of them. However, that money comes from somewhere, and we’ve been paying a decent chunk of money each fortnight to Toyota Fleet Management. This expense covers everything from fuel to servicing, tyres, admin fees, registration, insurance, interest on the vehicle cost and then the vehicle cost as well.

Obviously with it stopping the cost for us goes down significantly. We’ll have to pay for our own fuel, servicing, insurance etc but there’s no interest or vehicle cost involved, and I’m pretty pleased about this.

I can quit work!

By the time this post comes out I will have finished my full time role for a big building company. I’ve been there for 13 years, and we timed our departure date for the big lap of Australia with the end of the lease to make things simple and easy. 

When we took the lease out we knew we wouldn’t want to travel any earlier than 5 years as the kids would be too young, but they are at a decent age now and we want to head off. Yes, I could have shortened the lease, but it didn’t make financial sense.

Is it worth getting a Novated Lease?

At the end of our original novated lease post, I said that we were in the ‘still worth it’ category, but only just. I reckon now, I’m not swayed either way, and would happily not do one again.

Yes, it has the potential to save you a fair chunk of money, but it comes at a cost of your time and frustrations too, especially if you are going to deviate from the average Joe who takes out a novated lease.

If you have a simple situation, you have no plans to change anything long term and you want to get a new vehicle they are a great option, but they are a pain in the backside once you complicate them at all.

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