– By Marc Sibbald –
Fleet Auto News has compiled the annual list of top 10 novated lease car by surveying the main salary packaging and fleet management companies in Australia. The list is compiled each year to highlight which new makes and models are popular when using salary packaging.
The big thing impacting the rankings this year is vehicle supply. The leasing companies had lots of enquires on cars they couldn’t deliver. Massive vehicle order pipelines were highlighted by the four fleet management organisations listed on the ASX (SG Fleet, Eclipx, MMSG and Smart Group) during their results presentations. Each one of them highlighted the significant revenue opportunities in future periods if the vehicles are delivered in 2022.
Andrew Kerr, Director of Sales and Marketing at Inside Edge, said, “Overall enquiry levels are still high as there is real interest in new cars due to prevailing interest rates, strong employment and high levels of savings and debt reduction over the last few years.”
Matthew Newman, Head of Novated and Consumer at SG Fleet, shared that five manufacturers supplied the majority of novated lease cars for their customers.
“The top 5 manufacturers make up 48.5% of orders being Toyota (15.9%), Mazda (10.6%), Ford (8.6%), Mitsubishi (6.7%), and Hyundai (6.7%),” confirms Newman.
“The Subaru Outback was a stand-out performer this year, given sweeping upgrades across the range. It climbed from position 37 to position 5 when it was released in March, and it’s still our 7th most popular model.”
It’s no surprise that SUVs and 4X4 vehicles dominated the top 10 list of novated lease cars last year. Simon Haidar, Group Executive – Sales and Product Services at McMillan Shakespeare Group, pointed to the trend to buy cars so families could #holidayherethisyear.
“Despite the continued industry challenges in 2021, we saw the popularity of SUVs remain – in particular the Mazda CX-5 and Toyota RAV4. And strong demand for such models as the Ford Ranger and Toyota Landcruiser show we’re looking for outdoor adventures again after the lockdowns. Interestingly, we’re also seeing growing interest in EVs, with several hybrid models, whilst not in the top 10, certainly moving up the lists in popularity,” says Haidar.
Dereck Cooke, National Group Leasing Manager at Fleetcare, sees novated buyers adding accessories so they can escape for a weekend adventure in their new car.
“Novated vehicle selection continues to follow the general purchasing trends with dual cab utes such as Hilux, Ranger, Triton and D-Max being popular with novated drivers,” says Cooke.
“With novated drivers having more flexibility around pricing, we are also seeing a number of these utes being fitted out with additional options, such as bull bars, roof rack systems and driving lights so that drivers can take their vehicles off road.”
The top three vehicles were standout winners. The survey results placed them clearly ahead of the other vehicles in the list with the most overall nominations and a higher ranking with the nine companies that submitted data for the survey.
Here are the top 10 novated lease cars delivered in Australia during 2021.
- Ford Ranger
- Toyota RAV4
- Mazda CX-5
- Toyota HiLux
- Toyota Landcruiser Prado
- Mitsubishi Triton
- Hyundai i30
- Toyota Landcruiser
- Isuzu D-MAX
- Mazda3
Frank Agostino, Managing Director at Fleet Network, explains why Toyota has five cars in the list and is always popular with their customers.
“Toyota continues to be a vehicle highly recommended for a novated lease. We find a lot of our clients choose the Toyota product because of the high re-sale value at the end. It’s not unusual a client will pocket up to $50k in post-tax dollars at the end of a Landcruiser novated lease. Considering the stock shortage, it highlights Toyota’s strength in the market,” says Agostino.
Myles Pollett, Direct Sales Manager at Toyota Fleet Management, suggested their top 10 list may have looked different if there were no supply constraints.
“Some of the other cars you would expect to see have been hurt by supply,” said Pollett. “Vehicles for lifestyle is another area – light off road SUVs, Dual Cab 4x4s and 4WD’s – we anticipate demand will stay strong for these vehicles. They always have been popular in Australia but the pandemic really accelerated the growth there.”
Electric Vehicles as a novated lease
There were no EVs in the top 10 for 2021 though the experts are predicting a fast rise once supply becomes plentiful.
Fleets are getting ready to adopt electric vehicles with many entering the test and trial phase during 2021. Novated leasing provides Fleet Managers with a guide to popular vehicles that will be in demand in the future (which is important when setting residual values). So it was great to get comments in this year’s survey indicating that the general public want to drive EVs.
Matthew Newman, Head of Novated and Consumer at SG Fleet, confirmed the interest from employees in salary packaging an electric vehicle.
“We’re pleased to see the appetite for low emission vehicles, specifically EV’s, has increased significantly over 2021.”, said Newman.
Bobby Karanfilov, CEO at Simplygreen Salary Packaging, saw the interest in electric vehicles surge in 2021. He said the Tesla Model 3 just missed out on a Top 10 spot. “It’s exciting to see the growing interest in EVs and we expect this trend to continue in 2022,” said Karanfilov.
There were several comments in the survey about the link between initial enquiry and orders for electric vehicles (mainly Tesla). Andrew Kerr, Director of Sales and Marketing at Inside Edge, provided some insight to this emerging trend in 2021.
“There are two conclusion that can be drawn from the variance from enquiry to delivery, one is people’s general interest in electric cars but not quite ready to make the change; and the second is related to delivery times being pushed out. We are genuinely surprised and encouraged by the interest in electric cars from a novated point of view. Next year with the wide range of electric cars coming to the market we can only see the take up rate increase significantly, bring on 2022 and 2023.”
Myles Pollett, Direct Sales Manager at Toyota Fleet Management, looks at the recent success of hybrid vehicles and reminds us that EV products need to reflect what the market wants if it hopes to become mainstream.
“I suspect this year we will see more of the same. The growth of Hybrid is expected to continue. I think the BEV (Battery Electric Vehicle) switch is coming however it still has a few years before it hits critical mass like Hybrid has of late. The demand/growth for Hybrid has well and truly matured over the last 1-2 years, driven by the popularity of the RAV4.” says Pollett.
Cars that just missed out
It’s always hard to compile a top 10 list when the data comes from different sources and companies operating at different scales. There were some new car models that made the top 10 for smaller salary packaging companies but were lower in the ranking with the larger players.
Here’s the list of vehicles that deserve a special mention.
- Isuzu MU-X
- Toyota Kluger
- Subaru Outback
- Ford Everest
- Nissan Navara
