Novated leasing is a tax-efficient way to finance an electric vehicle. An EV through a novated lease could save you $9,000 a year on Fringe Benefits Tax, and with the electric car discount plus import tariff discounts, it’s even more affordable.
A survey found that while price was a barrier for 84% of Australians, they’d consider an EV through a novated lease arrangement. Let’s take a look at why. For more novated lease electric vehicle finance options, check this out.
Tax Savings
You may have noticed more electric vehicles on the road or at the servos lately, for good reason. Not only do EVs offer significant savings on running costs, but they also help reduce Australia’s imported fuel bill.
Novated leasing offers substantial tax savings on an EV because payments are deducted from your pre-tax income through a three-way agreement between you, your employer and the novated lease provider. It can result in up to 57% fringe benefits tax savings, making EVs more affordable.
Low Running Costs
As battery technology continues to evolve, the cost of electric vehicles will decrease. It makes leasing an excellent way to try out EV driving. For more novated lease electric vehicle finance options, check this out.
It also protects against an EV’s value depreciating more rapidly than a gas vehicle. When you lease, the leasing company will deal with any loss of value.
Whether you’re looking for a small car designed for inner-city commuting, a family-friendly SUV, or a sports car to rival a supercar, an EV is right.
A novated lease is a more innovative and quicker way to get into an EV, with ORIX offering a wide range of makes and models with different leasing options and inclusions. Take advantage of ORIX’s national purchasing power and fleet discounts[1] to maximise your EV benefits. Get a free, no-obligation quote today.
Flexibility
Leasing a vehicle is a great way to save money and try the latest technology. Unlike buying, where the car is paid off over a set period, your monthly lease payments include all running costs such as registration, maintenance and tyres. You’ll also be able to claim the cost of electricity you use to charge your EV (NSW Gov, 2021).
Alternatively, subscription services like Steer EV offer full-feature electric vehicles with a fixed monthly fee. These subscriptions typically also include auto insurance and require zero upfront cash down.
EVs and PHEVs are becoming increasingly popular thanks to their environmental benefits and lower running costs. They can also help reduce Australia’s reliance on imported fuel and free up funds that could be used locally. And with novated lease deals that can offer savings of up to 47 per cent on Fringe Benefits Tax, it’s easier to make the switch.
Customisation
There are a lot of factors to consider when choosing between owning or leasing an electric car. Here’s a quick overview of each option’s benefits, taxation policies and process.
With a fully maintained novated lease, all your vehicle’s running costs are included in your regular payments. These include fuel, registration, insurance and maintenance. It makes it easy and convenient to budget for your motoring expenses.
As a bonus, EVs are FBT exempt (until mid-2027 for EVs and April 2025 for Plug-in Hybrid Electric Vehicles). It is a significant savings opportunity. Plus, by salary sacrificing into your novated lease, you pay less tax on your income, which will further reduce the cost of your new EV. Then there’s the Government EV discount, which further reduces the purchase price of eligible electric cars.
Suppose you’re thinking about buying or leasing an electric vehicle. In that case, you’ll want to know whether any federal or state-level incentives can help make it a good financial decision. It is particularly important as the EV market grows and EVs become more affordable to buy and operate than gas-powered vehicles.