Many Australians have noticed that our country has fallen behind the rest of the world regarding electric vehicle (EV) uptake. To help more Australian drivers get behind the wheel of cleaner, more efficient vehicles, the Labor government announced an EV policy prior to the election.
There is now a commitment to tax changes that will make a real difference to the total cost of ownership for EVs, especially when you get behind the wheel of one through a novated lease.
Under the Labor government’s EV policy, there’s now some real financial incentives for choosing an EV over an internal combustion vehicle.
Import tariffs gone
Labor’s incentives start with cutting import tariffs on imported EVs priced below the luxury car tax threshold of $84,916, a move which could see the price of a $50,000 EV, such as a Nissan Leaf, reduced by $2,000.
That’s a good start, but it’s the Fringe Benefits Tax (FBT) exemption on EVs that should get business buyers, and employees, considering a novated lease.
It’s a move that could knock up to $15,000 off the FBT bill for business vehicles, that are also used as personal vehicles, or that are financed through a novated lease,and the good news is those benefits could start as early as next month!
If you’ve been considering an EV for a while but have been put-off by that high initial purchase price, then the prospect of acquiring one through a money-saving novated lease is about to get a LOT more tempting.
Novating an electric vehicle
So how does a novated lease work?
Well in brief, it’s a three-way agreement between an employer, an employee, and a novated lease provider.
It allows you to obtain the vehicle of your choice, and pay for the running costs from your salary, before it’s taxed. This reduces your taxable income, ensuring there’s more money for you each pay day, and less for the tax man.
It’s worth stressing that it is the total cost of running the vehicle that comes out of your salary – that’s finance, insurance, servicing, licensing, fuel – the lot.
Aaahh, fuel! Now that’s one of the ways a novated lease on an EV differs from a novated lease on a conventional vehicle. You won’t have a fuel card for petrol, but you are able to claim the cost of charging up at a station.
If you have a charging station at home, you can claim the cost of electricity used as well. You’ll just need to ensure that the charging station is installed on its own meter to accurately claim the usage.
Of course the other way a novated lease on an EV differs, is that you won’t be paying FBT for a vehicle acquired after July 1, making your car much more affordable.
In fact, the total savings over the life of a novated lease could be over $31,000, providing a huge incentive to those considering a novated lease to choose an EV for their next vehicle.
That’s going to see a lot more EVs on our roads, providing supply can keep pace with demand, and a lot more EVs on the used vehicle market in a few years’ time, pushing down the prices of used EVs. This can only be a good thing.
After years of slow uptake on EVs this is a refreshing change that should really boost demand for them. Let’s hope that increased demand is met with a corresponding increase in supply, as well as some much-needed price drops.
Electric vehicles have so many reasons to recommend them. With their instant torque, increased driveability, silent running, and lower running costs, they’re a joy to drive, and of course there’s nothing coming out of that non-existent tailpipe, so the planet will thank you as well.
If you’ve been thinking about an EV for your next vehicle, then there’s no better way to get behind the wheel of one than a money-saving novated lease from Fleetcare, and right now’s the time to do it.
Ring Fleetcare today on 134 333 for the perfect novated lease on that electric vehicle you’ve been dreaming about.