The Australian Government has made purchasing an eligible electric vehicle (EV) through a novated lease electric vehicle even cheaper. It is because novated lease payments are salary sacrificed from pre-tax income, reducing the employee’s income tax liability.
The new FBT exemption eliminates this tax on low-emission cars leased through a novated lease, encouraging the uptake of these eco-friendly vehicles. So why not consider an EV today?
Save Money on Fuel
EVs produce far less emissions than petrol and diesel cars, which means they have a lower environmental impact. Moreover, charging an electric vehicle is usually cheaper than fueling it.
Additionally, an EV’s running costs are generally cheaper to service than a petrol car. They have fewer moving parts and don’t need to be replaced as frequently. It can translate into significant savings for novated lease drivers.
Novated leases are a popular option for people purchasing an electric car. The leasing arrangement allows employees to pay for the vehicle and its running costs using pre-tax income. It helps reduce taxable income, which can result in significant tax savings.
The Australian Government has also made saving money on an EV easier by exempting Fringe Benefits Tax (FBT) on all eligible electric vehicles. It makes novated leasing an even better option for those interested in buying an EV, as all the vehicle’s running costs can be paid from pre-tax income.
An additional benefit of leasing an electric vehicle through a novated lease is that it’s likely to have a higher trade-in value than a petrol car. It is because there’s a growing demand for these vehicles in the secondhand market and a more robust aftermarket service network for them.
If you’re considering purchasing an EV, we recommend contacting our team of experts to discuss your options. We can help you find the right car while considering your budget and lifestyle requirements. We can also help you maximise your eligibility for government incentives to make the transition to an EV much more affordable.
Save Money on Taxes
A novated lease electric vehicle is one of the most cost-effective ways to get behind the wheel of an EV. By bundling your finance and running costs, you’ll save money on taxation each year. Plus, you can claim all the EV maintenance costs, including registration, insurance and tyres. And because EVs are more fuel efficient, you’ll save even more on petrol and diesel expenses!
An EV on a novated lease also allows you to choose from various vehicles. And with the Federal Government waiving FBT for eligible electric and plug-in hybrid cars, it’s now easier than ever to find an affordable EV that suits your lifestyle.
EVs are typically cheaper to run than traditional cars because they don’t require costly and resource-limited fossil fuels for their engines or transmissions. But the upfront purchase price of many models remains a barrier to uptake among Australians. A recent survey by novated leasing company Novated Lease Australia found that 46 per cent of Australians would consider switching to an EV if they could salary sacrifice it under a novated lease arrangement.
All the running costs are bundled into your monthly payments, reducing the overall tax burden. Sometimes, you can avoid paying sales tax by purchasing your EV through an online dealership. However, carefully review the paperwork and ask about any markups or discounts hidden in the fine print.
Some EVs also come with a $7,500 rebate or credit to help lower their purchase prices. These incentives are often passed on to lease customers, so you can save thousands by choosing an EV on a novated lease.
With new Government incentives and novated leasing, EVs are more affordable than ever. With a novated lease, the cost is also tax efficient as the lease repayments and running costs are paid out of pre-tax income. It reduces your PAYG and income tax liability, helping you save even more.