If you are considering EV ownership, a novated lease finance option is a great way to get behind the wheel sooner. It allows you to pay for the EV and running costs out of pre-tax salary (car salary sacrifice), potentially saving thousands in tax.
New EVs are also exempt from Fringe Benefits Tax, reducing the cost of an EV novated lease. For more EV novated lease finance options, check this out.
Lease-to-Buy
There’s a good reason you see more electric vehicles on our roads and at the servo: They’re cheaper to run than petrol or diesel cars. That’s thanks to federal tax laws allowing EVs to be fully FBT exempt when financed via a novated lease.
Through a novated lease, you pay for your EV and associated running costs (including fuel, servicing, registration, insurance, and tyres) from your pre-tax salary. It can save you thousands in both upfront and ongoing savings.
At the end of your novated lease, you can purchase the car for the buyout value that’s written into your contract. It may make sense if demand for your EV is high or you anticipate higher-than-expected wear-and-tear costs. If you decide to buy, you’ll also be able to take advantage of ORIX’s fleet discounts. Whether you choose to lease or buy, we recommend using a professional to help with your financial decision. It can ensure you get the best deal and are covered for any unforeseen circumstances.
Lease-to-Lease
Many people think buying an EV is a good idea as it offers the excitement of complete ownership and allows you to take advantage of government incentives that aren’t available to leasees. However, it can also result in a significant amount of upfront fees, including excess wear-and-tear, which can be challenging to recover from. For more EV novated lease finance options, check this out.
If you’re considering purchasing an EV, consider getting a novated lease to help make it more affordable. Novated leasing is a salary package option that reduces your taxable income by combining car expenses into one monthly payment, including registration, insurance and maintenance costs.
Lease-to-Rent
In some cases, leasing an EV can be better than buying one. However, a significant drawback of leases is the hefty fees if you cancel your agreement early. You could be stuck with thousands of dollars in early termination charges.
Fortunately, Australia encourages EV adoption with FBT exemptions that make vehicles more affordable through novated leasing. The Treasury Laws Amendment (Electric Car Discount) Bill 2022 removes FBT liability for employees with zero or low-emission electric vehicles financed through a novated lease.
It is a fantastic way to get into an eco-friendly vehicle, especially for those not ready to commit to long-term ownership. Plus, a novated lease can help reduce your taxable income and package your monthly costs into a single payment. For these reasons, it’s no wonder that the EV market has boomed in recent times. With an EV lease, you can test drive the latest models and get behind the wheel without worrying about a significant upfront cost.
Lease-to-Subscription
The monthly payments of leasing an EV are often significantly lower than buying or financing a new vehicle over the same period. For the most popular electric cars, it can be the only way that some people can afford to drive one at all. For more EV novated lease finance options, check this out.
The Labor Government’s recent introduction of the Treasury Laws Amendment (Electric Car Discount) Bill 2022 makes EVs, PHEVs and hydrogen fuel cell cars even more affordable. As of July 1 2022, all EVs financed through a novated lease are exempt from the Fringe Benefits Tax, making them significantly cheaper than most other vehicles in Australia.
In addition to the GST savings, EVs are cheaper than traditional petrol and diesel models. Using an EV will reduce fuel costs and maintenance expenses, which are claimable through the running cost allowance of a novated lease. Plus, the ORIX Fleet discounts and national purchasing power make it easy to find a quality service provider and save on routine costs like maintenance and tyres.