Save $1000s with a EV novated lease
The Labour Government has made Electric Vehicles (EVs) and PHEVs exempt from fringe benefits tax as of July 01, 2022.
They’ve decided to take action and make electric vehicles more affordable.
This new “Electric Car Discount” policy will see this discount applied across all EV’s (listed below) up to the Luxury Car Tax threshold ($89,332 for the 2023/24 financial year). The FBT exemption also applies to most vehicle running costs covered by a novated lease.
The FBT exemption on novated leases will make a significant difference to the overall cost of an EV and paying for running costs.
Here’s an example cost comparison for a 2023 Tesla Model 3 (including running costs), financed with a novated lease, a car loan and paid for outright using cash. The calculation is based on a 5-year term and factors in the fringe benefits tax exemption, plus the GST savings on the vehicle purchase and running costs available with a novated lease.
The calculation assumes a driver based in NSW with annual pre-tax salary of $120,000 and a car loan interest rate of 7.5% p.a. Running costs based on 15,000km driven per year and include insurance, registration, servicing and tyres.
The official announcement of the FBT exemption from the Labour party stated:
“If a $50,000 model is provided through employment arrangements, Labor’s fringe benefits tax exemption will save employers up to $9,000 a year. Often FBT is passed on to employees – and those employees will benefit directly from Labor’s policy. Savings will be even higher for more expensive models (up to the luxury car tax threshold).”
As it stands in Australia, only 1.5% of all registered cars on the road are electric, compared to the UK’s 17% and Norway's incredible 85%!
The Tesla Model 3 is the one EV stands as the clear Australian favourite dwarfing sales of its competitors and now getting on top of supply issues - you can currently have a Tesla in 8-10 weeks from ordering.
BYD are also making a big push in to Australia in 2023 and are a lot of car for the price.
Labour hopes that more car manufacturers will now work harder to deliver more affordable electric cars to Australians.
To learn how much more you can save with a novated lease[ speak to one of our team today](/quotes).
If you want to see what other perks are available for EV drivers in your part of the country, read our guide to EV incentives and rebates in Australia.