BYD Atto 3 Novated Lease: Is it Worth it?

Following the approval of the Electric Car Discount Bill, eligible electric cars will be exempt from FBT effective from 1 July 2022.

Both BYD Atto 3 variants meet the definition of battery electric vehicles and are therefore exempt from FBT provided the price falls below the luxury car tax threshold of $84,916 for 2022/23. At the time of writing, the following Atto 3 models are eligible for the EV FBT exemption.

Yes, a BYD Atto 3 can be procured on a novated lease like any other car. A novated lease is accessed through your employer through a salary packaging arrangement with a novated lease provider.

Zecar can help you match you with the best novated lease provider for your company, make an enquiry here.

Yes, buying (or rather procuring) a BYD Atto 3 through a novated lease will result in tax savings which will reduce the overall cost of owning the car. To illustrate the benefit of an FBT exempt electric car we’ll compare it to an outright purchase in the following example.

James works as a Sales Representative for a New South Wales (NSW) based company.

• Drives 15,000 km per annum
• Earns $100,000 gross income per annum
• Procure a BYD Atto 3 Extended Range ($51,011 MSRP) through a novated lease and a salary packaging arrangement through her employer.

BYD Atto 3 Novated Lease vs Outright Purchase

Over a four-year lease, the total costs of the novated lease are $69,277 - this does not include any tax savings. This is ~$6,800 more expensive compared to an outright purchase.

The total cost of the novated lease after tax savings is $52,332. This makes the novated lease ~$10,000 cheaper than an outright purchase after tax savings. The tax savings arise from being able to reduce your pre-tax salary by the lease payments and running costs - resulting in James being taxed a lower amount. We explain this in more detail here.

This analysis does not take into account additional interest paid on a home loan or foregone interest on a term deposit for the outright purchase option.

If James decides to sell the BYD Atto 3 at the end of the lease, she'll pocket the difference between the sale price and the residual value ($20,163). This will further increase the case for the novated lease.

The table below the key numbers in the example discussed.

If we factor in the likely additional interest paid on a home loan from using cash to pay for the vehicle or the foregone interest earned on a term deposit, the savings from a novated lease are even higher, $18,043 to $21,973 after four years. Refer to the below table for the difference in potential savings across various scenarios.

If you want to better understand the various ways you can save money we recommend reading this step-by-step breakdown.

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The cost of a BYD Atto 3 on a novated lease will depend on a number of factors including; the price of the car, interest rate, term of the loan, running costs, and your level of income.

Based on our analysis, if you earn a median Australian full-time salary ($97,510) or above and drive an average distance (13,000 km) or more, there is a strong likelihood a BYD Atto 3, will be cheaper to procure on a novated lease compared to an outright purchase.