Category: Car Leasing

The latest EV technology may seem expensive, but driving an EV is much more attainable with a novated lease. This salary packaging option helps reduce taxable income and package vehicle expenses into one simple regular payment.

With advanced battery technology and new charger networks, EVs are becoming more affordable in Australia. Moreover, salary packaging an EV can save the 47 per cent Fringe Benefits Tax (FBT). For more information about the EV novated lease vs buying outright, click here.

Buying Outright

Leasing an EV is popular due to the quick introduction of new technology and a lack of ownership commitment. When you hire an EV, you pay GST on the residual value (representing the car’s original purchase price) but not on running costs such as fuel, servicing, registration, tyres and insurance.

This makes leasing an EV more affordable than buying. However, there are several pros and cons to leasing. At the end of your lease, you will have no equity in the car and can face hefty fines if you turn it in early. Moreover, you can’t use the car as a trade-in or sell it. Buying an EV offers full ownership and access to government tax credits. Purchasing an EV will require a larger upfront payment but allows you to pay off the loan at your own pace and not be bound by mileage restrictions.

Lower Upfront Costs

Leasing typically involves a down payment and monthly payments that are lower than you’d pay to finance a car over the same period. Plus, you can benefit from a few years of warranty protection.

EV technology evolves much faster than conventional vehicle models, so leasing an EV keeps you on the edge of new features and capabilities. But if similar cars sell for less at the end of your lease than the purchase price you agreed to in your contract, or if a used model with similar technology is available, buying your leased EV may make sense rather than turning it in. For more information about the EV novated lease vs buying outright, click here.

Buying an EV allows you to modify or customize it however you want, giving you the flexibility to sell or trade it later. But if you change your mind, you might face steep early termination fees or penalties.

No Maintenance Costs

While buying outright allows you to sell or trade in the car at any time, leasing requires that you return it at the end of your term. Depending on how well you’ve maintained the EV and whether you’ve exceeded your annual mileage cap, that could leave you without any equity or money to show for your efforts.

Leasing companies often include fuel, servicing, insurance and tyres in your monthly payments, as well as the costs of installing a home charger. You may also be able to access state and utility rebates that are unavailable for those who buy outright. However, if you decide to sell your EV at the end of the lease, you may not be able to recoup any tax credits you’ve claimed.

Tax Credits

Since 2022, eligible electric vehicles have been exempt from Fringe Benefits Tax (FBT) when leased through a salary-sacrificing arrangement. This could reduce the upfront cost of an EV by up to $9,000, depending on which car you select.

However, this exemption only applies if the vehicle is leased from an employer and does not apply to privately purchased cars. It’s still a good idea to seek financial advice about the implications of leasing an EV for your circumstances, including means-tested government benefits. For more information about the EV novated lease vs buying outright, click here.

Another benefit of leasing an EV is that at the end of the lease period, you can buy the vehicle for the projected resale value written into the contract. This can be a good option if demand for the car is high at the time of lease-end.

No Zero Equity

When your lease ends, you will not have equity in the car. This means you can’t sell it or use it as a trade-in to get your money back.

However, this doesn’t mean you can’t purchase your EV at the end of the term. You can, but you’ll need to pay the residual amount plus lct.

A novated lease is a great way to save money on motor vehicle ownership. Not only is it more affordable for you, but it also comes with tax advantages for you and the leasing company. Many novated lease companies will show you how much money you can save by leasing your vehicle rather than purchasing it. The comparison will usually be based on the cost of leasing the vehicle without salary packaging. For professional novated lease Adelaide services, check out at vehiclesolutions.com.au/can-anyone-have-a-novated-lease-in-adelaide now. 

Getting finance approved for a novated lease

Novated leasing is an affordable and convenient way to finance a new car. This type of finance is much easier to get approved for than a traditional car finance deal. Its advantages include a variety of tax benefits and a guaranteed repayment schedule. If you’re interested in a novated lease in Adelaide, here are some steps you can take.

First of all, your employer must co-sign the lease. If your employer does not provide a co-signatory, it’s best to go with a company that does. Often, private companies will have salary packaging services. You should discuss salary packaging with your employer to see if your company will support it. If your employer approves the deal, they can also claim GST on your payments.

Another advantage of novated leases is that they can include running costs and car accessories. That way, you won’t be left with a car you can’t afford. Additionally, a novated lease can reduce your tax payable. This can greatly benefit low-income people who can’t afford a full-priced car outright.

You can also convert your existing car loan into a novated lease. However, it’s best to consult a car loan broker with the best options. Before signing any contract, ensure you’ll be better off after the refinancing. It’s also important to find out how much the break costs will be. You may also have to pay application fees if you’re switching companies.

Tax and GST advantages of a novated lease

When you purchase a new vehicle on a novated lease, you can take advantage of tax and GST benefits and save thousands of dollars over the vehicle’s lifetime. Rather than paying sales tax or GST on the car purchase, you’ll pay only the lease payments. A novated lease also allows you to take advantage of discounts on running expenses, such as car insurance and fuel.

Another benefit of a novated lease is that you will only have to pay GST on the purchase price of the vehicle, not the running costs. This can save you up to $3,000 in GST over the life of the lease. But, of course, the Luxury Car Tax and general GST discount thresholds can affect these savings. Also, you’ll save on the cost of tyres and servicing.

Tax and GST advantages of a novation: Because there’s no GST associated with the purchase price, a novated lease can reduce the overall purchase price by as much as 10%. It can also give you flexibility at the lease end – you’ll be able to return the car or pay less and own it outright. For professional novated lease Adelaide services, check out at vehiclesolutions.com.au/can-anyone-have-a-novated-lease-in-adelaide now.

Another tax benefit of a novated lease is that it doesn’t require any upfront or ongoing expenses from the business owner. Moreover, since salary deductions pay novated leases, they don’t attract GST. The Australian Taxation Office has recognised the benefits of novated leases and recognizes them as a tax advantage.

Advantages of a Novated Lease in Adelaide

A novated lease may be an excellent option if you are a working person in Adelaide and are looking to lease your next car. Novated leases allow you to reduce your overall purchase price by up to 10%. These leases also give you flexibility at the end of the lease period. You can keep the car, pay a lower rate, or own it outright.

A novated lease can save you thousands of dollars, depending on your needs. In addition to helping you secure your dream car, you can also save a lot of money on the vehicle’s running costs. This means you can keep more of your pre-tax salary to invest in your new car or truck.

Another advantage of a novated lease is that you won’t have to worry about paying high car fees. Your employer will take care of all the running costs of the car for you, including fuel. They will also pay for tyres, registration, and insurance. All you have to do is make the monthly payments on time.

Moreover, a novated lease offers tax savings. You will not have to pay GST on the vehicle purchase and running costs, saving you money in the long run. In addition, a novated lease also eliminates the hassles associated with lump sum payments. If you change jobs, you won’t need to worry about your car payment. For professional novated lease Adelaide services, check out at vehiclesolutions.com.au/can-anyone-have-a-novated-lease-in-adelaide now.