The best novated lease electric car offers the right combination of features, price and driving range. But precisely what are these features?
Electric Vehicles have seen increased adoption with novated lease drivers since the implementation of the government's Electric Vehicle Discount bill, which removes fringe benefits tax (FBT) for battery, hydrogen fuel cell and plug-in hybrid EVs valued under $89,332.
1. Low running costs
Electric vehicles (EVs) and plug-in hybrids have become more widespread on Australian roads recently, likely thanks to government incentives making them almost tax-free. While some may find the upfront costs too costly, novated lease arrangements make these cars much more affordable.
Salary packaging a vehicle through a novated lease allows you to drive an electric car while saving on finance, registration, insurance, servicing and tyre costs - not only that, but due to EV Discount policies, these cars could even be cheaper on a novated lease than petrol-powered models!
FleetPartners reports that electric and plug-in hybrid vehicles were responsible for half of their novated leases in June; vehicles like the BYD Atto 3 Extended Range make EV ownership easy - potentially saving thousands via its FBT exemption!
2. Low maintenance costs
Electric vehicles (EVs) require far less maintenance than petrol cars due to having no spark plugs, exhaust pipes or catalytic converters to maintain. Although their brakes must still be replaced periodically, the cost for annual servicing on an EV typically averages 40% less than equivalent servicing on an internal combustion engine (ICE) vehicle.
3. No FBT
Best novated lease electric car is a popular salary packaging strategy among Australian workers, enabling them to use part of their pre-tax income for regular car payments from their new novated lease agreement. Now, thanks to the Electric Vehicle FBT Exemption, lease agreements on eligible EVs and plug-in hybrids are tax-free!
Therefore, by taking out a zero-FBT novated lease agreement on an MG ZS Essence EV and driving it over five years at 20,000 km per year for five years over that timeframe, your savings could add up to over $10K.
Novated leasing gives drivers a significant incentive to switch to electric or plug-in hybrid electric vehicles (PHEV) significantly as their marginal tax rate decreases. For buyers nearing their marginal tax rate threshold, this makes the transition more enticing.
4. Less chance of complications
Electric vehicles (EVs) aren't only more environmentally friendly; they also don't contain many components that could fail on traditional petrol cars - meaning less time at the mechanic. Still, you must keep an eye on your battery and have access to an effective home charging station and commercial ones for occasional charging needs.
Novated leasing offers an easy and cost-effective solution for purchasing an EV. There's no GST to pay, and significant income tax savings can be realized. At the same time, maintenance packages include electricity usage charges, registration renewal fees, CTP costs, servicing needs and tyre maintenance - making novated leasing an excellent way to experience all of the advantages an EV offers.
5. Low tyre maintenance costs
The BYD Atto 3 Extended Range makes an excellent novated lease selection due to its stylish, spacious, engaging drive and ample driving range - ideal for Australian full-time commutes and qualifying for FBT exemption (if it costs under the Luxury Car Tax threshold of $84,916, or from July 1, 2023 $89,332) with maintenance costs covered through your novated lease and supported by ORIX Fleet discounts - you're sure to have an enjoyable ride while saving.
This year, SG Fleet's innovative leasing sales have experienced significant growth due to rising employment and lower interest rates; however, demand is outpacing the supply of popular models. "Vehicle enquiry levels continue to rise across all major salary packaging and fleet management companies with manufacturers struggling to keep pace," said Philip Owen, National Novated Manager for SG Fleet.