blackwrx Doing 25000km per year alone will reduce this amount by $300pm of FBT. Doing this makes your total payments similar to mine. You should be able to control all ins and outs in a novated lease - the whole point is that they cost your employer nothing. I only ever go for 2 year novated leases @55% residual (or the lowest someone will give me) which then enables me to refinance at the residual amount after 2 years which reduces lease payments and FBT significantly. Or I change cars! Keep in mind that your employer will probably reimburse your input tax credits and that if you do 25000kms your monthly cost will be $1700 of pre - tax dollars which is $900 pm of "real money" (if you're in the top tax bracket) for all running costs and lease payments. Take away the profit you make after paying off your residual and selling the car and your net cost of ownership including all running costs is closer to $700pm (after tax dollars) So your quote looks fair. I'd look at a shorter lease term, though. Hope this makes sense Mark <{POST_SNAPBACK}> Are you sure the fringe benefits tax is calculated on the balance of the car after 2 years? I've taken over a lease on a company car previously and they charged me fringe benefits tax on the original purchase price of that car. 20,000 a year is a bit too much to pay for a 38K car. If you are going to go on a novated lease then you should really do at least 25,000km/year before you can see much of the benefits. The stutatory fringe benefits tax rates are applied to cars on novated leases and in your case you will be paying 20% on the purchase price. That's about 8000K fbt per year. If you do 25,000km then you only have to pay 11% fbt which is about 4.5K per year. Therefore you can reduce your cost to about 16K per year. These are the quotes I have been given in the past based on 25000km/year: 200sx 45000$-17,000 residual 30% Typhoon 59000$-22000 residual 50% Clubby 54000$-22000 residual 50% Clubby cost the same as the typhoon even though it was cheaper but because it was a v8 the maintenance was more which made up for the finance/fbt savings. If you don't think you can do more than 25000km/year and that you will use the car for mainly business use, then I guess going purchase hire will be more cost effective.