Why vehicle maintenance approval makes absolute sense
Two weeks ago, I had the pleasure of taking my car in for a major service. My partner dropped the car off but she called later that day to tell me the service was quoted at nearly $7,000. I was very surprised. The first question I asked was:
Did you mention to the Service Advisor that the car is a novated lease, and that we use maintenance control to approve the service items?
The answer was clearly no. I called the Service Advisor and asked them to call maintenance control for approval of each item. This was to ensure we received the discounts that a novated lease should attract. Because it was such a large sum, maintenance control called me to discuss the items being repaired, as well as the overall pricing. I managed to obtain a discount of $1,777 — a whopping 26% discount on the price quoted by the Service Advisor.
| Maintenance Group | Maintenance Description | Maintenance Control | Service Advisor |
| Cooling System | Flush Cooling System | $154 | $250 |
| Electrical | Battery | $875 | $1,075 |
| Other | CV Boots | $861 | $1,182 |
| Other | Power steering | $1,141 | $1,425 |
| Engine | Timing Chain / Belts | $199 | $275 |
| Other | Seals & Gaskets | $539 | $845 |
| Other | Miscellaneous | $308 | $410 |
| Body & Trim | Wiper inserts | $145 | $182 |
| Auto Transmission | Auto Trans Fluid | $503 | $715 |
| Wheels | Rear Wheel Alignment | $153 | $195 |
| Brakes | Brake Fluid | $135 | $235 |
| Total | $5,012 | $6,789 | |
| Savings through maintenance control | $1,777 | ||
| Savings through GST | $501 | ||
| Savings through Tax at 32.5% | $578 |
GST savings on the invoice
Because my car is a novated lease with Novate@bility my employer can claim the GST, which means another $501 saved on the maintenance bill. Including this, I have saved another 7.4% of the original quote.
Tax savings by salary packaging
When you salary package your novated lease, maintenance costs form part of the fully maintained cost of running the vehicle. Over time, your vehicle budget builds up and you use this to pay for items like servicing. Because this is way outside my budget, I have topped up my budget using pre-tax salary. In this situation, I saved 32.5% of the cost, meaning another $578 and a further 8.5% of the original quote.
In total, I saved $2,856 or 42% of my service quote, simply by salary packaging.
Pay@bility provides benefit administration services and was founded to deliver Australia’s first employee self-service model for salary packaging. Novate@bility is a division of Pay@bility.
