A novated lease is a salary packaging option where the finance and vehicle running costs are taken from your pre-tax salary. It means you pay less tax and you also decarbonise your transport.
The Federal Government has introduced a new policy to make EVs more affordable for all Australians. It exempts Fringe Benefits Tax (FBT) on some electric vehicles that fall below the luxury car tax threshold ($84,916) and removes a 5% import tariff.
Save Money
Electric vehicles aren’t just environmentally friendly but also cheaper to run. A novated lease electric vehicle can save you money on fuel, service, and tyres. In addition, EVs have a lower total running cost allowance than petrol or diesel cars, so you won’t have to pay as much for maintenance or tyres during your lease term.
The electric car discount makes electric vehicles more affordable for fleets and employees who use novated leases to salary package their EVs, as well as helping them reduce their emissions in line with national targets. The government has also cut import tariffs, making a $50,000 model even more affordable for employers using a novated lease arrangement to fund their fleet.
Another way a novated lease electric vehicle can help you save money is by giving you access to a wide range of discounts on service, maintenance and tyres. So you can get deals for new tyres, roadside assistance and car washing simultaneously as you’re saving on fuel and servicing.
You can also save money by leasing your EV from a company that offers a new car subscription program, which packages many of the costs of having a car into one monthly payment.
Speaking with an expert is best if you’re unsure whether an EV is a good car. A professional can help you decide which car best suits your needs and give you a detailed breakdown of how the costs work.
Like any car, an electric vehicle will lose value throughout its life. If the vehicle’s value is lower than the expected residual value at the end of your lease, you will have to pay a fee to bring it back to the dealership or risk losing the car if you decide not to renew the contract.
Save the Environment
Electric cars are an excellent option to help the environment and reduce your carbon footprint. They emit fewer emissions than a traditional car for every kilometre they drive, saving you money on fuel and maintenance costs over the life of your lease.
The best way to make an electric vehicle more affordable is through a novated lease, which provides a more innovative and quicker way to access the latest EV models. It works like this: Your employer deducts the cost of your EV from your pay before tax, which enables you to save thousands of dollars in running fees and taxes.
In addition to saving money on fuel and maintenance, a novated lease electric vehicle offers several other benefits that are not available with an outright purchase. For example, a novated lease can reduce your total cost of ownership by bundling your car payments and all other expenses, such as tyres, servicing, insurance and registration, into one simple, hassle-free payment each month.
Another benefit of a novated lease is that you are eligible for various government incentives, such as the Electric Car Discount Bill, which removes the fringe benefits tax (FBT) on EVs priced below the luxury car tax threshold and reduces the import tariff. It means an EV novated lease can be considerably cheaper than a petrol vehicle for those who qualify.
An EV will have fewer moving parts than a petrol vehicle, making for less costly repairs and service intervals. It can also reduce the overall maintenance costs of your EV over its lifespan, which can help you save even more.
Going for an EV is a big decision, but it can be one of the best moves you’ll ever make. With a novated lease, you can take advantage of the latest EV models and government incentives to help you get on the road sooner and enjoy the significant savings of an electric vehicle. To learn more about how a novated lease can work for you, speak with our team today!
No Fringe Benefits Tax (FBT)
Electric vehicles (EVs) are becoming increasingly prevalent worldwide as more people look to move to a more sustainable transport alternative. The cost of EVs is coming down, and several government incentives are in place to make them more affordable.
The new FBT exemption has been included in the Treasury Laws Amendment (Electric Car Discount) Bill 2022, which passed both Houses of Parliament on 28 November. This legislation is designed to help Australian businesses and employees transition to EVs, particularly those who salary package an EV in a novated lease or provide ‘tool-of-trade’ vehicles for their employees.
While the policy is excellent news for employers and employees, it contains a few vital restrictions. For example, a novated lease must be between two individuals, and the same employer must employ both parties.
Despite these restrictions, the new FBT exemption will likely significantly impact EV take-up by employers and employees. It is excellent news for businesses that currently do not provide their employees with a ‘tool-of-trade’ vehicle, as it could help them attract and retain the best talent in the market.
Contact our team today if you want to learn more about how a novated lease could benefit you. We’ll be happy to discuss your options and help you decide whether this is the best way to access your EV sooner.