If you’re keen to own an EV, novated leasing presents a unique opportunity for you to drive your dream car while enjoying significant cost savings. From how novated leasing works and how much you could potentially save, to the best way to go about getting one, here we guide you through the process of getting an EV on a novated lease.
What is novated leasing and how does it work with EVs?
If you’re unfamiliar with novated leasing, it’s essentially a three-way agreement between an employee, their employer and a finance company. It would involve you – an employee – entering into a novated lease agreement with your employer and a finance company.
This allows you to lease a vehicle of your choice for both personal and work-related purposes using pre-tax income. While your employer facilitates the lease deductions from your salary, you remain responsible for the vehicle, including expenses such as fuel, maintenance, insurance, and registration.
When it comes to EVs, novated leasing works pretty much the same as traditional vehicles. With the rising popularity of EVs and the potential tax benefits associated with novated leasing, it presents an attractive option if you’re considering transitioning to an electric vehicle while enjoying financial advantages.
Can I save money on an EV with novated leasing?
Typically, vehicles that are also driven for personal use are subject to Fringe Benefits Tax. In 2022, this was scrapped for zero or low-emissions vehicles, meaning you can escape this charge.
When it comes to potential savings, even though electric cars are generally pricier than regular petrol cars, a novated lease can bring the weekly costs to a comparable level.
According to Oly, even with a $20,000 price difference between a Tesla Model 3 and a petrol car like the Mazda CX-5, someone earning $80,000 per year and driving 15,000 kilometers annually for five years could still end up paying the same weekly amount of $241 with an EV novated lease.
Moreover, since the EVs lease payments are deducted from your salary before tax, this can result in potential tax savings as your taxable income is reduced.
I want to get an EV on a novated lease, how can I do this?
It’s best to first connect with your employer just to double-check that proceeding with this is something they’d agree to. Once you have the green light, research and choose a novated lease provider experienced with EVs. ActewAGL partner Oly is a leader in EV novated leasing, making the process seamless. To see what you could save, enter some details in Oly’s Novated Lease Calculator to find out.
Next, select the EV you want and request a quote from your chosen novated leaser, including all associated costs. When you have that, present it to your employer for signing off. Once all parties are satisfied, agree to the lease terms and notify your employer to deduct lease payments from your pre-tax salary.
Want home charging? Arrange for the installation of a home charging station if needed. Once everything is set up, you can enjoy the benefits of driving an EV, including cost savings and those all-important environmental advantages.
Summary
- Novated leasing is a three-way agreement between an employee, their employer and a finance company, allowing the employee to lease a vehicle for both personal and work-related use using pre-tax income.
- Zero or low emissions vehicles are exempt from Fringe Benefits Tax, resulting in potential savings. Novated leases can be over 25% cheaper than financing the same car with a car loan, with upfront savings possible.
- To get an EV on a novated lease, check with your employer, research and choose a novated lease provider experienced with EVs. Select the EV, request a quote and present it to your employer for approval. Agree to lease terms, arrange for home charging if needed and enjoy the benefits of driving an EV.
Are you considering making the switch to an electric vehicle? Save time and money and stay fully charged with exclusive access to electric vehicle charging solutions and information to support you on your EV journey, all available through ActewAGL’s evHub. Find out more here.
