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.