There’s never been a better time to get into an electric vehicle, and there’s never been a better way than through a novated lease with RemServ.
With the Australian Government’s Electric Car (EV) Discount, taking out a novated lease on an EV just got a whole lot cheaper. So, if you were thinking about making the switch to an eligible electric or hybrid vehicle your timing is impeccable.
As Queensland’s largest novated lease provider, we’re ready to help get you into an electric or hybrid car of your choice. We’ve geared up our systems and are working closely with key suppliers to help you make a confident choice – for yourself and the environment.
The New EV Discount: A Recap
Novated leases are required by law to have a certain amount of Fringe Benefits Tax be paid – it’s why pre- and post-tax payments are needed. With the Electric Car Discount however, a novated lease on an eligible EV is FBT exempt, meaning you don’t pay any post-tax contributions – for EVs retailing up to the Luxury Car Tax threshold of $89,332.
How Much Could You Save?
We’ve compared the potential savings you could get under existing novated lease policy with what you could enjoy under the EV Discount. Let’s say you earn $80,000, and you’ve decided an MG ZS Essence is for you, driving it 20,000 kilometres a year over a five-year lease.
Your estimated net benefit under the EV Discount is $26,295*
Your estimated net benefit under the existing novated lease legislation is $9,982*
That’s a potential saving of $16,313*!
EVs and Novated Leasing
Taking out a novated lease on an electric vehicle comes with many potential benefits, including:
A novated lease on an EV is fully FBT exempt – if its retail prices is below the Luxury Car Tax threshold of $89,332 – meaning all your payments are made from your pre-tax salary. This could reduce your taxable income – resulting in you potentially paying less tax than you would have otherwise.
Enjoy the budget convenience of having the car’s finance repayments and running costs – including electricity, registration, insurance and servicing – bundled into one regular pre-tax* payment across the course of the year.
In addition to the FBT exemption, the cost of running an EV could be less than a traditional petrol or diesel vehicle. The Electric Vehicle Council estimates that a city-based driver of a typical SUV, driving 15,000 kilometres per year, could save more than $135 per month on running costs.
Thinking about taking advantage of the Electric Car Discount? Think it’s time to talk to RemServ.
As Queensland’s largest novated leasing provider with more than 30 years’ experience, we know all there is to know about salary packaging a car. We’ve worked closely with key suppliers in the electric vehicle space and geared up our systems to help get you into an eco-friendly car of your choice.
Common Myths: Eco-Friendly Vehicles
We respond to five of the most common misconceptions about Electric Vehicles.
"They cost too much"
The upfront costs of electric vehicles are currently more expensive than conventional petrol vehicles, however things swing back in the other direction thereafter: powering an EV costs an estimated 70 per cent less per kilometre.
This is because EVs have lower running costs than regular cars: they have no engine, transmission, head gasket, filters or spark plugs.
Battery EVs also don’t require petrol or diesel. By way of a comparison: the average Australian driving 15,000 kilometres a year typically spends more than $2,000 on fuel; an EV covering the same distance costs around $600 depending on your electricity charges – that's an annual saving of $1,400.
"One charge doesn’t get you far"
Electric vehicle technology is constantly evolving. While the Electric Vehicle Council of Australia states that current EVs have an average battery range of nearly 480km, some newer models can get 550km on a single charge.
With the average Australian driving 38 kilometres a day, an EV owner who carries out a typical short trip each day could go for 10 or more days without needing to recharge, depending on their EV.
“It’s difficult to charge them”
Most new electric vehicles include an entry-level charger which simply connects to a typical electricity power outlet at home. Public charging solutions are also available across Australia. The Electric Vehicle Council of Australia website lists all available charging stations around Queensland and the rest of the country, including the types of chargers.
“Charging takes too long”
While entry-level chargers supplied with electric vehicles can take up to 30 hours to fully charge a vehicle, there are other options that reduce this timeframe. You can purchase higher capacity chargers available at an optional cost which can get the job done much more quickly.
Public chargers also can be much faster – with super-charge stations potentially adding up to 300 kilometres of range in 10 to 15 minutes, and regular charging stations often doing the job in less than five hours.
“They lack power”
Electric vehicles have the capacity to deliver full torque instantly, allowing them to accelerate faster than regular vehicles.
They can also provide better handling and cornering due to the gravity-lowering placement of their batteries at the bottom of the vehicle.
*Novated Lease example: The estimated potential tax benefit is exclusive of GST and is based on the assumption that you would have paid for the lease from your post-tax salary (as opposed to salary packaging those payments from your pre-tax salary or a combination of your pre and post-tax salary). Payment includes: Your car payments, fuel/electricity, registration, tyres, insurance and scheduled servicing. The estimated annual benefit will vary depending upon salary, employment circumstances, selected benefits and applicable tax treatment. The example assumes that the car is an eligible zero or low emissions vehicle, the value of the car at the first retail sale was below the luxury car tax threshold of $89,332 for fuel efficient vehicles, the car is first held and used on or after 1 July 2022, you earn $80,000 a year, a 5-year lease term, an annual distance travelled of 20,000kms and a 28.13% residual value. The estimated annual operating costs includes estimates of fuel, maintenance, tyres, registration, comprehensive insurance and fleet management fee and are exclusive of GST. GST of 1/11th is payable on your ECM contributions. State Stamp Duty rates apply. PAYG tax rates effective 1 July 2021 have been used. From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law. However, you can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.
Things you need to know: This general information doesn't take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax or financial advice. Conditions and fees apply, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your employer’s approval. RemServ may receive commissions in connection with its services.
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