Novated leasing has always been a great way to own a new car without needing to save a large amount of cash to make the purchase. Now electric vehicles, thanks to the Electric Car Discount Bill which gives EVs and PHEVs an exemption from FBT, make more sense in a salary packaging arrangement despite the high purchase price.
The annual Car Leasing Guide from Fleet News Group explains how you save money with a novated lease and in the 2023 edition there’s a section dedicated to electric vehicles.
Peugeot launched the e-2008 in September and it’s one of the few models where you can directly see the benefit of the FBT Exemption in a novated lease when comparing the petrol engine to the electric powertrain.
I requested a novated lease quote from Fleet Network for both models to see how the numbers work.
In the table below you can see the significant difference in Manufacturer’s List Price. This is the number one reason people don’t consider purchasing an electric vehicle when looking for a new car. And the fortnightly lease payment reflects the higher purchase price. Then the magic of salary packaging and the FBT Exemption kicks in.
With a novated lease you need to pay Fringe Benefits Tax (FBT) because you’re financing the car through your employer and using it for personal travel (This applies to all company cars).
Electric and PHEVs have been made exempt from FBT by the Federal Government to encourage the fast adoption and help reduce the carbon emissions from transport. The FBT is a significant component of a novated lease repayment so without it, the savings are significant.
When comparing the e-2008 SUV to the 2008 in a novated lease, the higher purchase price of an electric vehicle is no longer a factor in the consideration of which powertrain to buy. You can pick the one that suits your lifestyle and your environmental goals.
(Annual salary $95k, 15,000km per annum, 5 year novated lease)
