Novated Lease Electric Car Savings

Massive Novated Lease Electric Car Savings

As the world continues to aim for a more sustainable future, the rise of electric vehicles (EVs) is continuous. Electric cars are notably gaining major traction nationally, this is thanks to their positive impact on the environment, and the added potential for car owners to save more money. For those interested in or currently own an EV, take note that the Australian government has an initiative that will make electric cars under $89,332 100% fringe benefits tax (FBT) exempt.

What does it mean when we say the ‘novated lease electric car offer’? It means that employers will no longer have to pay FBT on EVs, which, in turn, means that for employees who are considering doing a Novated Lease through their work, they can do so without having to wear the extra cost of FBT – making a Novated Lease on an EV the deal of a lifetime. In simple terms – you could save up to 50% on a car related costs such as finance, registration, insurance, maintenance, and tyres by doing a Novated Lease compared to traditional finance.

Interested in financing a vehicle through FinanceBeagle, or interested in the EV novated scheme? Our team are here and keen to help.

EV FBT Exemption Novated Lease

What is a Novated Lease?

A novated lease is an agreement between you, your employer, and a finance company. It allows you to lease a vehicle of your choice while your employer takes on the responsibility of making lease payments on your behalf. The payments on the lease are deducted from your salary pre-tax, which then reduces your taxable income, and can result in more savings.

Here are some of the benefits of utilising the EV novated lease offer:

• Bundled Convenience: With a Novated Lease the car finance and all running costs including registration, insurance, fuel, maintenance, tyres and roadside assist can be bundled into one convenient monthly payment – meaning you don’t have to worry about budgeting.
• Tax Savings: With a traditional novated lease, a portion of your pre-tax salary goes towards lease payments. This reduces your taxable income, leading to lower tax payments. Traditionally by providing a Novated Lease the employer is subject to FBT as they have provided a benefit, and the employee ends up paying this FBT component of the lease from their post tax salary. This is the key difference that is not applicable to EV Novated Leasing making it the “deal of a lifetime”.
• GST Savings: With a Novated Lease, you also receive GST credits on both the car purchase as well as associated running costs. This means you don’t have to pay GST on the vehicle or running costs, providing you with more savings.
• FBT Exemption – The Game Changer: As the government urges Australians to invest in EV’s they have decided to remove the requirement for FBT for EV’s until mid 2027 and for Plug in Hybrid Electric Vehicles (PHEV) vehicles until April 2025. This is the real game changer as with no FBT to worry about on an EV it means that the entire Novated Lease payment is taken out of your Pre-Tax Salary meaning it is tax free!

The EV Novated Lease Savings Breakdown

• FBT Exemption: Electric vehicles under $89,332 are 100% FBT exempt, which means that businesses do not have to pay FBT on these vehicles. For employees doing a Novated Lease – this means that the entire car payment is pre-tax or free of Income Tax. For instance – if your Income tax rate was 30% – you would be saving yourself 30%!
• No GST: Your set to save a further 10% as you will not have to pay the GST on both the car purchase and running costs – something you will only ever be able to achieve by doing a Novated Lease.
• Low Running Costs: Electric vehicles have low running costs, as they do not require fuel and typically are cheaper to service. This means businesses and employees are saving significantly on these expenses.
• Discounts available: By using a Novated Lease provider and utilizing their buying power you can typically access fleet pricing on cars as well as discounts on things such as fuel, roadside assistance and service costs.

This novated lease electric car offer provides a great opportunity for Australians to enjoy the benefits and lifestyle of driving an electric car while actively saving money. By investing in these potential government incentives, tax benefits, and reduced running costs, you will be making a positive environmental impact, along with a positive financial impact for yourself. However, it’s crucial to conduct thorough research, consider your driving needs, and consult with a specialist such as FinanceBeagle to determine if a novated lease electric car is the right choice for you.

FinanceBeagle can also assist employers with the setup an offering of Novated Leasing to staff which is a great employee benefit and a way to retain and attract good employees.

Get in Touch with FinanceBeagle to Discuss Your Novated Lease

Embracing electric vehicles through a novated lease can be a smart and sustainable investment towards a greener and more cost-effective future. If you’re interested in knowing more about the novated car lease scheme, get in touch with a FinanceBeagle on 1300 225 525 or through our online form.