If you’re one of the millions of Australians thinking of making the switch to an electric vehicle (EV), don’t wait. Rising fuel prices, increasing costs of living expenses and climate consciousness are the factors driving people to purchase electric cars. They are no longer cool novelty vehicles that start with the letter T, but economically viable alternatives to the skyrocketing costs of owning and running a petrol car. While an electric car will save you at the pump, an electric vehicle car loan won’t come cheap. Average prices for a full electric car start at around $42,000 and can range up to $200,000. An electric vehicle on a novated lease, however, is a very smart solution if you want to save on every aspect of your car ownership.
Because a novated lease uses a carefully calculated combination of your pre-tax pay and take-home pay to fund repayments, plus removes payable GST from the vehicle cost, getting an EV on a novated lease will make you a Tesla-level genius.
1. Bypass The Petrol Pump
A full electric car allows you to drive right past the service station, every single time. Unless you need to stop for the paper or a snack, you’ll never have to stop to get petrol again. A full battery charge on an electric car (EV) can take you as far as 300 kilometres or more. Australia currently has over 2000 electric charging stations and more are coming. These charging stations have commercial-grade chargers than can charge the car in minutes. Through a novated lease, we can ensure you receive a home charging kit that will allow you to recharge your electric vehicle overnight. This will need to be installed by a professional.
EVs have proven to be significantly cheaper to run than petrol-based vehicles. Fuel savings can be up to 70% and maintenance savings can be up to around 40%. Let’s say you travel the average amount in Australia which is just under 14,000 km per year, you could be saving around $1000 per year on petrol alone.
2. Minimal, Low-cost Maintenance
On a fully novated lease, any maintenance your EV needs will be covered from your car repayments. There will be no surprise out-of-pocket costs if something goes wrong with your car, or if it needs repairing after damage due to an accident. Battery electric vehicles (BEVS) have fewer moving parts than petrol or diesel car so they don’t break down as often or as easily. There is also less servicing needed and no complicated exhaust systems that can deteriorate from carbon build-up.
As you already know, petrol cars can have a seemingly endless array of expensive problems. Whether it is the starter motor, fuel injection system, radiator or one of thousands of other issues, many of the components found in a petrol car are not used in electric vehicles. This means less chance of complications and less time at the mechanic. Lauded for their technical performance, EVs are considered the next evolution of the internal combustion engine. They do however have tyres which will need to be repaired and replaced from time to time. An EV with a novated lease will make car servicing and tyre maintenance a stress-free, low-cost experience.
3. Take Advantage of Tax Cuts
In a bid for a cleaner future, the new Labor government is supporting the purchase of electric cars for consumers and businesses. They have cut import taxes and fringe benefits tax for EVs that fall below the luxury car threshold of $79,650 as of July 1st, 2022. This is part of what has been named the Powering Australia Plan. Their current strategy is designed to have 89% of new car sales as electric by 2030 with at least 15% of all vehicles on the road electric by the same year. Currently, electric vehicles make up about 2% of on-road vehicles in Australia. The plan is also going to make it possible to review current building codes to allow more charging options. They also plan to install another 1,800 public charging stations by 2025.
So how much exactly will you save from the government’s plan? If you’re looking at a $60,000 EV, you could save about $3,000 on the import tax cut.
If you’re a business owner, you’ll enjoy an FBT tax exemption. This could work out to be a saving of $15,000 off the Fringe Benefits Tax bill for the personal use of electric cars operated by businesses or financed under a novated lease. For example, save as much as $8,700 on a $50,000 model such as a Nissan Leaf or 12,000 on a $70,000 model such as a Tesla 3.
4. More Choice of EV
A novated lease opens up your options when it comes to choosing the EV that’s right for you. What might have been a stretch financially under a car loan with payable interest, you’ll find an EV affordable and manageable on a carefully structured novated lease. We’ll work with you to not only find a vehicle from a range of manufacturers but work to your budget so you know exactly what you’ll pay – and what you’ll save.
If you’ve been putting off getting an electric car because of the cost, a novated lease can help you get on the environmentally-friendly road sooner. While making the switch to a completely electric vehicle is becoming a more popular option, we can also help you find hybrid vehicles if you’re not ready to make the absolute switch. Just don’t wait to start the process. Because of such high demand, orders of new EVs can take several months to order.
5. Save on Charging
Even though your EV will come with a home charging station, you’ll still need to use commercial charging stations from time to time. You may also prefer to use these for a faster charge before a long trip or if you need extra battery power in a hurry. These charging stations do come at a cost, but obviously, they are nowhere near as expensive as petrol. On a novated lease with a petrol car, you would be equipped with a fuel card that allows you to pay for petrol with pre-loaded funds from your novated lease repayments. With an EV, you’ll be able to claim the costs of your charges back through your salary packaging provider. You’ll even be able to claim the costs of the electricity you use at home. To do this accurately, your charging station will need to have its own separate smart meter.
Let’s Talk Electric Vehicles
At The Salary Packaging People, we’ve already helped our customers make the switch to a cleaner, cheaper car through electric cars on novated leases. If you’re ready, let us get you behind an electric wheel by contacting us or calling 03 5229 4200.