Novated Lease Electric Car: Novated Lease – Electric Car Benefits

Many Australians consider switching to an electric car but are put off by the high price. With a novated lease, you can get an EV without the cost barrier.

Thanks to the new FBT exemption effective July 1st 2022, EVs priced below $89,332 qualify for a novated lease. Read on to discover some key EV benefits you’ll enjoy through a novated lease. For more novated lease electric car benefits, check this out.

Reduced running costs

With the introduction of the EV Discount, the financial case for an electric vehicle via a novated lease has never been stronger. For example, a $50,000 EV such as an MG ZS Essence could save you up to $10K over five years compared to the same car under a traditional novated lease. It is because novated lease payments for an eligible EV or PHEV are FBT exempt, meaning they are deducted from your pre-tax salary and, thus, reduce your taxable income.

The FBT EV exemption, combined with lower running costs and advanced battery technology, means that novated leasing has now become even more affordable for employees. In addition to the potential savings, a novated lease will cover all your leases and running costs in one regular payment, making bill juggling a thing of the past. As a result, it is an ideal way to make an EV a reality without any upfront cost or risk.

Reduced taxes

The high purchase price of electric vehicles has been a barrier for many Australians, but novated leasing offers an alternative. Rather than paying for your car out of post-tax income, your payments under a novated lease are deducted from your pre-tax salary through salary packaging (or a combination of pre and post-tax salary for eligible EVs). The result is significant income tax savings and GST savings on your vehicle payments running costs, including fuel/electricity, registration, tyres and insurance and maintenance.

The federal government has recently passed legislation to exempt EVs, PHEVs and Hydrogen fuel cell vehicles from Fringe Benefits Tax for novated lease arrangements, further adding to the financial benefits of an EV novated lease over outright ownership or a car loan. The exemption is expected to save employees thousands of dollars a year. To see how much you could save, visit our novated lease calculator.

Flexible payment options

If you want to get into a new electric car and are eligible for tax rebates, it’s worth considering a novated lease. These vehicles are exempt from Fringe Benefits Tax (FBT), which can make a big difference in the overall cost of an EV.

Novated leases can also be used for current cars, which makes it possible to take advantage of the EV discount even if you don’t yet know which car is right for you. Plus, access to wholesale pricing means you’ll likely find the best deal on a new EV. For more novated lease electric car benefits, check this out.

We’ll help you to draw up a budget that includes all of the lease and running costs in one regular payment. It will give you a clear idea of how much your EV costs to run each month and eliminate bill shock. Then, you can enjoy your new EV and reduce your carbon footprint without any headaches.

Flexibility in vehicle selection

With advanced battery technology and growing investment in charging infrastructure, EVs are getting cheaper to operate. EVs that are both new and used under a novated lease can qualify for the FBT EV exemption and potentially save employees up to $10,000 a year on Fringe Benefits Tax (FBT).

Fleetcare’s novated leasing experts can help you choose an eligible electric car that can be financed with your pre-tax salary. They will also work out a budget that includes all your lease payments and running costs in one manageable regular amount, reducing bill-juggling and making a novated lease easier to manage.