Car Leasing

A novated lease could be the perfect option if you’re considering an eco-friendly electric car. Novated leasing bundles all your vehicle and running costs into one convenient monthly payment and removes payable GST on the EV.

With FBT not being applicable to novated leases on EVs, this makes it the ‘deal of a lifetime’ for EV buyers.

1. No FBT

A novated lease for eco friendly electric car is one of the best ways to save money on both your purchase price and running costs. That’s because FBT (Fringe Benefits Tax) is eliminated on EVs when done through a novated lease agreement.

The federal government introduced this policy to encourage the use of EVs. It’s also a great way to help reduce emissions and protect our planet.

EVs have fewer moving parts, so they need less maintenance than petrol or diesel cars. They’re also quieter and produce no exhaust fumes or particulate matter, which benefits our environment.

Zero or low-emission vehicles are exempt from FBT when leased through a novated lease, meaning you’ll save up to $10,000 in income tax a year on your EV. It’s worth noting, however, that this FBT exemption ends on 1 April 2025, so it’s important to consider the implications of this change if you want to lease an EV. It includes how it may impact means-tested government payments like Centrelink benefits. It’s best to speak with a qualified accountant to discuss these issues.

2. No GST

Electric vehicles have low running costs and are extremely environmentally friendly. They produce no exhaust emissions, and their batteries can be recycled after the end of their life so they don’t pollute the environment. They also use significantly less petrol and generate lower net emissions compared to traditional cars.

With the FBT exemption and reduced GST rate, a zero or hybrid electric car is more affordable through a novated lease than it would be outright. Novated leasing uses your pre-tax salary to pay for the vehicle, reducing your taxable income and saving you money in both the short term and the long term.

Zero or plug-in hybrid electric vehicles that are under the luxury car tax threshold of $89,332 can be leased through a novated lease, and the employee does not have to pay FBT on the payments. It is a big saving for employees as it removes the payable GST on the purchase price of the vehicle, which can be thousands of dollars upfront. It can make EVs more accessible to Australian drivers than ever before.

3. No tyres

With the Australian Government’s Electric Vehicle Discount, EVs are becoming more affordable. If you are looking to make the switch to a greener transport option, an EV on a novated lease for eco friendly electric car is definitely the way forward.

The key benefit of a novated lease is that all the costs associated with owning a car are paid out of your pre-tax salary. It reduces your taxable income and, in turn, increases your take-home pay. EVs are no different, and by using a novated lease, you can save thousands over a traditional car loan or cash purchase.

The great thing about EVs is that they generally require less maintenance than petrol cars. They have fewer moving parts, and there is no complex exhaust system to break down. However, an EV still requires servicing, and you will need new tyres from time to time. With a fully maintained novated lease, all the servicing and replacement tyres will be included in your car repayments, so you don’t have to worry about budgeting or out-of-pocket expenses. Our novated leasing team can help you find the best EV for your budget.

4. No maintenance

With a novated lease for eco friendly electric car, you can bundle your car payments, fuel, roadside assistance and other costs into one monthly payment. It helps you to reduce your taxable income and make it easier to purchase an electric car. EVs have meager running costs, so novated leasing is a great way to get on the greener side of life.

Many people assume that electric cars are expensive, but with a novated lease, they can be more affordable and accessible. It’s a salary packaging arrangement that allows you to pay for your vehicle expenses with pre-tax money, which is a big benefit to those who don’t want to commit to a full-out car purchase.

A novated lease is an agreement that allows you to lease a car for a specific period. This lease allows you to pay a fixed monthly amount for the vehicle. However, you can extend or refinance your lease for a different term if you wish. However, this will reduce the novated lease residual value. If you want to own the vehicle outright, you can pay off the residual value and take the buyout option.

Keeping residual values artificially high to keep payments attractively low

In the current economy, residual values have tended to be moderate but are still high due to the competitive nature of the automobile sales industry. Many car manufacturers artificially raise their residual values to make payments attractively low, and many consumers have no idea how to evaluate these residual values properly. Here are some tips to help you find the best car lease deal: Keep the residual value low and look for competitive rates. In addition, check out other terms and fees, as these can raise your monthly payments. The best residual values for a car lease are the ones that come with low payments and a good interest rate.

In Vehicle-Solutions novated leases, residual values are often artificially high to make payments attractively low. It can increase the price of the car, even if you can’t purchase it immediately. However, it is still possible to buy a car after three years of leasing it. If the residual value is artificially high, it will raise the price of the car.

A residual value is the value of fixed assets at the end of the lease term or their useful life. Lessors use this value to determine lease payments. The longer the lease term, the lower the residual value. The residual value is calculated by multiplying the cost of the vehicle by a percentage.

While residual values are not the only factor used to calculate lease payments, they are very important. If you pay attention to them, you’ll have a much better experience with the leased vehicle. The monthly payment will be lower, and you’ll enjoy the car more.

The residual value of a car is an important factor in determining the payments on a novated lease. It is not an absolute value but is based on anticipated mileage, depreciation, and market conditions. The car’s residual value is usually set by the car dealer or bank financing the lease.

How to calculate a novated lease residual value

One of the main parts of a lease agreement is the residual value. This figure will determine the monthly payments you’ll have to make on the lease. This value is determined by the residual value of the car you’ve leased. If the residual value is high, the residual payments you’ll have to make will be lower than they otherwise would be.

If the residual value is low, you’ll have to pay more for the car at the end of the lease. Sometimes, you can even pay more than you’re obligated to. This type of payment is called a balloon payment. It can be used to buy a new car or return a leased one.

The residual value of a lease is a crucial factor to keep in mind when selling or buying a lease. However, the value can vary based on the industry. For business owners, residual understanding value is important. The residual value of a leased car depends on the manufacturer’s price, the lease term, and the expected annual mileage of the car.

A residual value calculator will give you an idea of how much the car you’re paying will be worth at the end of the lease. Using the residual value calculator, you’ll be able to determine whether you’ll be able to negotiate a lower payment and get more for your car at the end of the lease.

It is important to know the residual value of your leased car before signing the lease. Typically, residual values are quoted as a percentage of the MSRP. Using the MSRP as your baseline, you’ll have an accurate residual value for your leased vehicle at the end of the lease term.

The residual value is different for open-end and closed-end leases. Open-ended leases are more flexible and have more freedom regarding mileage and lease terms.

Transferring a novated lease to a new employer if you are switching jobs

A novated lease is a contract between you and your leasing company that usually lasts one to five years. If you are changing jobs, you must inform your leasing company of your new employment. You can do this by filling out the appropriate forms and providing the necessary information. Once you have informed your leasing company, you will be given three options. First, you can continue to make your monthly payments. Second, you can transfer the lease to your new employer, and third, you can also renovate the lease with your new employer.

If you are switching jobs, you may have concerns about the future of your novated lease. Transferring a novated lease to your new employer is possible, but you should contact the provider before taking this step. Some certain conditions and restrictions will need to be adhered to.

A novated lease allows you to take advantage of your pre-tax income for your vehicle payments. This arrangement allows you to maximise the value of your salary by ensuring that you pay the least amount possible. The lease also enables you to use a portion of your salary to pay off the residual value of your vehicle and pay off the remaining debt with the lessor.

Typically, a novated lease allows you to upgrade your car with the flexibility of trading in your old vehicle. Once you have upgraded your vehicle, you can transfer the novated lease to your new employer and retain the residual value in the old vehicle. However, it is important to remember that the residual value of your old vehicle must be specified in your lease agreement. You can use a savings calculator to calculate this amount.

Taking the buyout option if your vehicle is worth more than its residual value

Many lease contracts include the option to purchase the vehicle at the end of the lease at a precalculated price. These provisions may differ based on the date of the lease. Learning about these provisions before signing a lease agreement is best.

Before you sign a lease agreement, you must know the residual value of your vehicle. You can find this out with a free VIN check from sites like Edmunds and Kelley Blue Book. You should also check whether your lease contract has any associated fees.

To take advantage of the buyout option, you must determine whether your vehicle is worth more than its residual value. It may sound not easy, but you must compare the residual value with the current market value. You can negotiate the residual value to sell your car to another dealer if it is higher. Otherwise, you can sell your car to CarMax or Carvana and get a nice buyout price.

As mentioned before, the market determines the residual value of a car. When gas prices are high, demand for hybrid and electric vehicles increases; as a result, your vehicle may be worth more than its residual value if you have driven it less than the mileage specified in your lease.

The residual value is the amount the car will be worth at the end of the lease term. Leasing companies use external organisations to determine what a car will be worth.