Novated Lease Electric Car: Get Behind the Wheel of an Environmentally Friendly Vehicle
An electric car on a novated lease can help you save on taxes while also getting behind the wheel of an eco-friendly vehicle. And with FBT exemption for EVs priced under the luxury car threshold of $89,332, its financial case becomes even stronger.
Novated lease electric car are also more cost-effective to run than petrol cars and the costs associated with charging it can often be claimed through salary packaging providers.
Save money on your taxes
Novated Lease Australia conducted a recent survey that revealed 46% of Australians would consider leasing an electric vehicle (EV) through salary sacrificed novated leasing, saving thousands upfront as well as decreasing taxable income.
Now that the Federal Government has waived Fringe Benefits Tax for eligible EVs priced under Luxury Car Tax threshold, novated leases offer the perfect way to go green. This exemption could make the difference between purchasing an eco-friendly EV for $50k vs conventionally, saving individuals up to $9000 annually in take-home pay savings.
SG Fleet advises its customers to obtain legal, tax and financial advice prior to entering any novated leasing arrangement for electric vehicle purchases, such as purchasing an EV.
Less maintenance
Recently you may have witnessed an upsurge in electric vehicles both on the roads and at your local servo, thanks to Australian government incentives and tax benefits such as FBT exemption, making eligible EVs virtually tax-free on novated lease.
With a novated lease, all of your car costs (such as registration, insurance, fuel consumption and servicing costs) can be included into one monthly payment – this reduces taxable income and could even save money through tax deductions.
Electric vehicles (EVs) differ from their petrol and diesel counterparts in that they rely solely on battery power when connected to a charging station, meaning fewer parts need maintenance, which in turn results in lower operating costs overall and therefore costs much less to own or operate an EV than its petrol or diesel equivalents.
Less chance of complications
Maintenance-wise, novated lease electric car (EVs) tend to experience far fewer issues than their petrol-powered counterparts; however, like any car they will still require servicing and tyre replacement on occasion; with a novated lease agreement these costs tend to be significantly reduced than when purchasing or hiring outright.
Novated Leasing can be an ideal way to use pre-tax income to pay for your new vehicle, and especially great if financing an EV/PHEV through this form. When done this way, GST is waived completely when purchasing it through this route.
Legislation passed in late 2022 has removed Fringe Benefits Tax (FBT) on eligible electric vehicles provided to current employees for private use via novated leasing arrangements. You’ll still need to carefully consider your budget and the complexity of FBT compliance when leasing an EV; including installation costs of a home charging station and possible excess mileage fees charged by your lease company.
Lower fuel costs
As electric vehicles (EVs) become more and more mainstream, salary packaging them through a novated lease may be the smarter and quicker way to acquire an eco-friendly vehicle. By salary packaging it, salary packagers could reduce running costs, potential tax savings and help Australia cut its imported fuel bill.
EVs feature fewer moving parts than petrol cars, making them less likely to break down and require maintenance services. Furthermore, their smaller exhaust system does not degrade from carbon build-up, while there are no complex radiators, starter motors or ignition systems to malfunction – saving even more money with their use! New EVs may qualify for FBT exemptions that encourage their adoption, saving even more.
Less time at the mechanic
Novated lease electric car (EVs) typically requires less maintenance and servicing can often be completed at local dealerships more easily due to having fewer moving parts and operating in an eco-friendly fashion.
With the Federal Government’s new Electric Car Discount policy and FBT exemption, electric cars have never been more financially rewarding to purchase through salary packaging or novated leasing agreements.
Novated leases make vehicle finance and operating costs easier by bundling them all together into a single, cost-efficient payment taken out of your pre-tax salary. You’ll see both financial savings from driving an electric vehicle (EV), as well as reduced fuel expenses that make this type of arrangement even more cost-efficient than its traditional counterparts.