Why Consider an EV Novated Lease?
Electric vehicles have become a popular choice for novated leasing due to potential tax savings, lower running costs and the environmental benefits. Depending on your income, driving habits and chosen vehicle, an EV novated lease may reduce your overall cost of ownership compared with traditional finance.
Benefits can include:
- Potential tax savings through salary packaging
- Lower charging costs compared with petrol
- Lower servicing and maintenance costs
- Bundled running costs into one payment
- Access to EV fleet discounts
What Is an EV Novated Lease?
An EV novated lease is a three-way agreement between you, your employer and a finance provider. Lease payments are typically deducted from your salary, with eligible electric vehicles potentially receiving additional tax benefits under current Australian tax rules.
At the end of the lease term, you may have options such as paying the residual amount, refinancing or upgrading to another vehicle.
How an Electric Car Novated Lease Works
Step 1: Choose Your EV 🚘🔍
Select an eligible electric vehicle that suits your budget and lifestyle.
Step 2: Receive a Quote 📋💰
Compare repayments, lease terms and estimated savings.
Step 3: Employer Approval 🏢✅
Your employer facilitates salary deductions through payroll.
Step 4: Drive Your EV 🚗 ⚡
Lease payments commence and you enjoy EV ownership benefits.
How Much Can I Save Under an EV Novated Lease?
Potential savings under an EV novated lease can be significant, depending on your income, chosen vehicle, lease term and driving habits. Because lease payments are generally made through salary packaging, eligible drivers may reduce their after-tax ownership costs compared with traditional finance.
Electric vehicles may also deliver lower running costs through cheaper charging and reduced servicing requirements.
For many Australians, the total benefit can come from a combination of:
- Potential income tax savings
- Lower fuel or charging costs
- Reduced servicing costs
- Bundled registration, insurance and maintenance
- Access to current EV incentives where available
Compare Main EV Finance Options
There is no one-size-fits-all way to finance an electric vehicle. The right option depends on your personal circumstances: income, employment type, budget and whether you prioritise ownership, lower repayments or tax efficiency.
Finance Option | Best For | Key Benefit | Considerations |
EV Novated Lease | Employees | Potential tax savings | Employer participation required |
Bank Loan | Buyers wanting ownership or cannot access salary packaging | Own vehicle sooner | Interest costs apply |
Cash Purchase | Buyers with savings | No finance costs | Large upfront spend |
Business Finance | ABN holders | Business structuring benefits | Eligibility varies |
Which EVs are Exempt from FBT? Best EVs for Novated Leases
Any electric vehicle that is eligible for the EV FBT exemption will benefit more from the tax advantages available under a novated lease. Eligible vehicles are electric vehicles that are first held or used after 1 July 2022 with a value (includes delivery fees, accessories and options) below the Luxury Car Tax (LCT) threshold for fuel-efficient vehicles: <$91,387 for 2025/26.
Popular models for an electric car novated lease include:
- Tesla Model Y
- BYD Sealion 7
- MG4
- Kia EV5
- Tesla Model 3
Need help choosing? Compare EV models before requesting a quote.
Compare EV Models
EV Novated Lease vs Car Loan
Since the introduction of the “Electric Car Discount”, novated leases have supplanted car loans are the most popular method to finance an EV purchase. The table below outlines the key differences between the two options.
Feature | EV Novated Lease | Car Loan |
Payment Source | Salary deductions | Personal repayments |
Potential Tax Benefits | Yes, subject to eligibility | No |
Running Costs Bundled | ✅ | ❌ |
Ownership | End-of-term options | Direct ownership path |
Is an Electric Car Novated Lease Right for You?
An electric car novated lease may suit:
- Full-time employees paid through payroll
- Drivers wanting predictable monthly costs
- Buyers comparing tax-effective options
- Households moving from petrol to EV
- Professionals wanting a newer EV sooner
It may be less suitable if:
- Your employer does not offer novated leasing
- You plan to leave your job soon
- You prefer immediate ownership