Electric Vehicle

Electric Vehicle Novated Leasing in Australia: Simple Guide

As EVs become more popular in Australia, many people are looking for cost-effective ways to make the switch. One of the best options is novated leasing, a tax-efficient solution that allows you to lease an EV while maximising savings.

Let’s break down everything you need to know about electric vehicle novated leasing in Australia, from how it works to how much you can save.

What Is Novated Leasing?

Novated leasing is a three-way agreement between you, your employer, and a leasing company, allowing you to lease a vehicle using pre-tax income. Here’s how it works:

  • Your Employer: They agree to deduct lease payments from your pre-tax salary, reducing your taxable income.
  • The Leasing Company: They provide you with the vehicle and handle the associated costs (insurance, maintenance, etc.).
  • You: You drive the car you want all while paying less tax and bunding your car related payments.

Novated leasing is especially advantageous for employees because it allows you to access better cars (like electric vehicles) at a lower cost compared to traditional financing methods.

Why Choose an Electric Vehicle (EV)?

Switching to an electric vehicle has several benefits, both financial and environmental. Here’s why more Australians are beginning to opt for EVs:

  1. Lower Running Costs:EVs are significantly cheaper to run than traditional petrol or diesel cars. Charging an EV typically costs a fraction of what you’d spend on fuel. It is even cheaper if you have solar power at your house!
  2. Reduced Maintenance:Electric vehicles have fewer moving parts, meaning fewer repairs, less servicing requirements and lower maintenance costs over time.
  3. Environmental Benefits:EVs produce zero tailpipe emissions, helping to reduce your carbon footprint and contributing to a cleaner, greener Australia.
  4. Government Incentives:The Australian government offers FBT exemptions for EVs to encourage the adoption. Some state governments also offer reduced registration fees and rebates.

How Does Novated Leasing for EVs Work?

novated lease

When you opt for a novated lease on an electric vehicle, the process is much the same as leasing a petrol or diesel car, with a few added perks. Here’s how it works:

  1. Choose Your EV:First, you’ll select the electric vehicle you want to lease. This could be anything from a Tesla Model 3 to a Hyundai Ioniq 5 or a Kia EV 6 Air.
  2. Get a Quote:You’ll receive a quote that outlines your lease payments, which include vehicle costs, insurance, servicing, and other related expenses.
  3. Salary Packaging:Your employer deducts your lease payments from your pre-tax income, reducing your taxable income and helping you save on taxes.
  4. Drive Your EV: Once everything is set up, you can enjoy driving your electric vehicle while benefiting from the tax and cost savings.
  5. End of Lease Options:At the end of your lease, you can either upgrade to a new EV, buy the car outright, or return the vehicle and move on.

How Much Can You Save with an EV Novated Lease?

The savings with novated leasing can be significant, especially when leasing an electric vehicle. Here are the main areas where you can save:

  1. Tax Savings:Novated leasing allows you to pay for your vehicle with pre-tax income, reducing your taxable income and resulting in lower tax payments. The exact amount you save will depend on your salary and the lease terms, but many employees save thousands of dollars per year.
  2. GST Savings:When you lease an electric vehicle through a novated lease, you don’t have to pay GST on the purchase price or running costs, which can save you even more money.
  3. Lower Running Costs:As mentioned earlier, electric vehicles are cheaper to run and maintain than petrol or diesel cars. Over time, this results in significant operational savings.
  4. Government Incentives:Some states and territories in Australia offer rebates or incentives for EV buyers, further reducing the overall cost of leasing an electric vehicle.

Is Novated Leasing Only for New Cars?

No, you can lease both new and used electric vehicles through a novated lease. Leasing a pre-owned EV can be an excellent option if you’re looking for even more savings.

EVs and the Future of Novated Leasing in Australia

As Australia continues to shift towards electric vehicles, novated leasing will become an increasingly popular way to finance EVs. The combination of tax savings, lower running costs, and government incentives makes novated leasing an attractive option for both employees and employers.

Employers benefit from offering novated leasing as part of their salary packaging, as it can improve employee retention and reduce payroll tax liabilities. For employees, it’s a simple and cost-effective way to drive an electric vehicle without the hassle of traditional financing or the upfront costs associated with purchasing a new car.

How to Get Started with Electric Vehicle Novated Leasing?

novated lease

If you’re ready to make the switch to an electric vehicle and want to take advantage of the savings novated leasing offers, here’s how to get started:

  1. Do Your Research: Start by researching the best electric vehicles available in Australia. Consider factors such as range, charging infrastructure, and running costs.
  2. Get a Quote: Contact a novated leasing provider, such as CarBon Novated Leasing, to get a personalised quote based on your salary, lease term, and vehicle choice.
  3. Talk to Your Employer:Ensure that your employer offers salary packaging for novated leasing. They will handle the paperwork and facilitate the lease payments.
  4. Enjoy the Benefits:Once everything is set up, you can start driving your new EV and enjoy the financial and environmental benefits that come with it.

Electric vehicle novated leasing is one of the smartest ways to get behind the wheel of an EV in Australia. With tax savings, reduced running costs, and the environmental benefits of driving an electric car, there’s never been a better time to make the switch.

Whether you’re considering a new or pre-owned EV, novated leasing can help you save big while driving smarter.