EV Novated leasing is a great way to get into an EV. It allows you to salary sacrifice your EV finance and running costs. It reduces your taxable income and enables significant tax savings.
The Labor Government recently introduced the FBT exemption on EVs and PHEVs that cost less than the luxury car tax threshold ($84,916 in 2022). It makes EV novated leases even more affordable.
Low running costs
Electric vehicles are a reliable, simple way to drive your car and will cost you significantly less to run than any petrol-powered vehicle. It is because the engine is replaced by a battery and electrical motor, meaning there’s no oil to change, fewer parts to wear out and lower running costs. Plus, EVs are backed by significant state/territory and federal government incentives and rebates. For more EV novated lease benefits, check this out.
These incentives can make an EV even cheaper to own and run. If you’re considering an EV, then consider novating it with us. We offer a wide range of fully electric and plug-in hybrid EVs so that you can find the right one for your budget and lifestyle. You’ll also save on expenses such as rego, insurance, servicing, tyres, roadside assistance, etc. With a novated lease, you’ll enjoy GST savings on your EV, and your driving expenses will be deducted from your monthly pre-tax salary.
The Australian Government is encouraging EV adoption by introducing a Fringe Benefits Tax (FBT) exemption for eligible electric and plug-in hybrid vehicles. FBT is a 15% tax on most of the car and running costs covered by your novated lease, so this reduction will make owning an EV more affordable.
The latest research from Novated Lease Australia found that almost half of Australians would consider switching to a fully-electric vehicle if it was salary sacrificed through a novated lease. And because the technology behind EVs is rapidly advancing, purchase prices may fall over time, further reducing your upfront costs. You can still take advantage of the FBT exemption if you are leasing your vehicle from an approved supplier like SG Fleet.
No FBT
If you’re considering buying an EV, then considering whether a novated lease is suitable for you is worth considering. Novated leasing is an affordable way to purchase a new vehicle and covers all running costs, including fuel, maintenance, tyres, registration and insurance. Plus, you’ll get a great trade-in value when it comes time to upgrade your car.
This change is designed to make it easier for employees to afford an electric car and help reduce emissions from Australia’s roads. Currently, we lag behind many comparable nations in EV adoption, and the Government is keen to encourage EV adoption through measures like this.
The FBT exemption also helps to offset the additional upfront costs associated with EVs, such as the higher battery price and installation fees. It’s essential to seek financial advice before deciding and determining your situation’s impact.
No deposit
EV novated leases can also provide lower upfront costs than buying or financing a car. It is because payments are deducted from your pre-tax salary through a three-party arrangement between you, your employer and the novated leasing provider (such as Maxxia). It allows you to gain concessional tax rates, including GST savings on the vehicle purchase price and running costs like fuel, servicing, tyres and more.
If you want to buy an electric vehicle, a novated lease is the most cost-effective way. While the lease may be a little more expensive than purchasing a car outright, it will save you thousands in running costs and help you pay off your debt faster. You’ll also get a higher trade-in value when it comes time to sell your electric car, so you’ll likely come ahead when all is said and done.
Considering the benefits of EVs, combined with the FBT and other income tax advantages of novated leasing, it makes sense to consider an EV as your next car. But be sure to seek independent financial and tax advice before deciding which car to buy or how to finance it. Maxxia can help you find the right EV for your needs, so contact us today for more information or to book a free consultation. For more EV novated lease benefits, check this out.