If you’ve looked at an electric vehicle (EV), or ute, recently and ruled it out on price, you’re not alone.
The upfront cost can feel hard to justify, particularly when comparing it to a petrol or diesel vehicle you know and trust. But what many drivers don’t realise is that the way you pay for an EV can make a meaningful difference to affordability and for those in the trades, the numbers are worth a proper look.
That’s where novated leasing comes in.
How novated leasing works
A novated lease is an arrangement between you, your employer and a leasing provider, like SG Fleet, that lets you pay for a vehicle through your salary. Instead of paying for everything out of your take-home pay, repayments and running costs are deducted before tax.
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That means you pay less income tax, and you don’t pay GST on the vehicle or its running costs. Rather than juggling multiple bills throughout the year, vehicle-related expenses can sit together in one regular repayment. For tradies managing cash flow, that kind of predictability counts for a lot.
How novating an EV stacks up
Under the Electric Car Discount, eligible battery electric vehicles accessed through a novated lease remain exempt from fringe benefits tax (FBT). FBT is the tax that would otherwise partially offset your salary sacrifice savings. Without it in the picture, every dollar of your vehicle’s finance and running costs, including insurance, registration, tyres and servicing, comes entirely out of your pre-tax salary. Already, it’s easy to see why eligible EVs can unlock a much stronger financial outcome than many people expect.
That’s a tax advantage that simply doesn’t exist for petrol or diesel cars and the real-world savings over a standard lease term can be significant. On top of that, an EV costs around 31 per cent of what a petrol or diesel equivalent costs to “fuel”. Fewer moving parts, less servicing, no oil changes. For anyone clocking serious kilometres for work, the running cost argument is already strong, and a novated lease amplifies it considerably.
What are the options for tradies?
The range of eligible EVs continues to grow, and it covers more than just passenger cars. The electric ute market in Australia is growing, and for day-to-day work use, capable electric SUVs and wagons from a range of established brands are already available and qualify for the Electric Car Discount. A novated lease calculator can be a useful place to start, helping you compare costs and better understand potential savings based on your circumstances.
If you live in certain areas, you may save further again. Several state and territory governments still offer additional EV incentives, from stamp duty exemptions to registration discounts, on top of the federal benefit.
Want to run the numbers?
Whether you work for a business or run your own, if you’re eligible for a novated lease, it’s worth taking a closer look before ruling an EV out. Speaking with a novated leasing specialist like SG Fleet can help cut through the noise and show how the numbers stack up in real life, not just on paper.
