An EV novated lease electric vehicle has never been cheaper, thanks to the government’s FBT exemption. It means battery, hydrogen fuel cell and plug-in hybrid electric vehicles up to $84,916 are now FBT exempt when salary is packaged through a novated lease.
Save Money on Tax
A novated lease allows you to salary package a vehicle and pays all its running costs (such as registration, insurance, servicing, tyres and car washing) from your pre-tax income. It can save you thousands of dollars in taxes, and you don’t have to worry about selling your old car when the new one is ready to be replaced.
It makes purchasing or leasing an EV much more affordable and can help you get behind the wheel of the latest models. The new electric cars available are great to drive and have been designed with your comfort in mind. It means they have spacious interiors and plenty of features, such as setting your preferred temperature with just a button press.
The FBT exemption on EVs, announced in May 2018, is another excellent reason to consider switching to an electric vehicle with a novated lease. This change will reduce the cost of owning an EV by up to $4,700 a year, making it significantly cheaper than buying a $50,000 model with cash.
The EV Discount, which will be phased in over the next few years, is expected to make an even more significant difference to the affordability of a novated lease electric vehicle. To demonstrate, beCarWise has created a calculator showing the potential savings for an employee earning $80,000 and choosing an MG ZS Essence with a five-year lease.
While the EV discount will not be able to fully cover the purchase or lease costs of every EV on the market, it should have a positive impact on driving uptake in the coming years. Australia lags well behind comparable countries in the uptake of EVs, so this change can help to speed up adoption and encourage a cleaner, greener transport system for the nation.
There are three main types of EVs: Battery Electric Vehicles, Plug-in Hybrid Electric Vehicles and Hybrid Electric Vehicles. A BEV like the Tesla Model 3 has no fuel engine and is powered entirely by an electric battery. At the same time, a PHEV uses an electric motor to assist the fuel-powered engine of vehicles such as the Mitsubishi Outlander so that they can travel further on each charge. HEVs, such as the Toyota RAV4 Hybrid, combine an electric and petrol motor to offer the best of both worlds.
Enjoy All the Benefits of Owning a Car
There are numerous benefits to owning your car. For one, it allows you to travel where and when you like without relying on public transport or waiting for someone else to get there. It also provides a sense of security and independence that you can’t find in any other mode of transportation.
Another benefit is that EVs are much cleaner than traditional vehicles and are great for the environment. As well as this, they have lower running costs and can save you a lot of money on fuel. It means that a novated lease electric vehicle is an excellent option.
A novated lease allows you to pay for your new EV with pre-tax income, lowering its overall cost significantly. It is called salary packaging and can be a great way to afford the car of your dreams, whether a fully electric or plug-in hybrid vehicle.
The Australian government has made EVs and PHEVs FBT Exempt under a novated lease, meaning that the car’s running costs are covered, and there is no Fringe Benefits Tax to pay. This, combined with advanced battery technology and more investment into expanding charging infrastructure, makes EVs more affordable for drivers considering leaping.
As a bonus, the demand for EVs is strong, and the vehicles will likely have a higher trade-in value when you’re ready to upgrade. In addition, the first year’s comprehensive car insurance can be financed with a novated lease, eliminating the need for you to come up with the cash at the time of purchase.
