EV Journey

It’s my first time going getting a car via novated lease, I’ve only ever purchased and owned by financing via a car loan in the past, like most people I guess.

There were several reasons for my choosing to go this route this time:

• Vehicle cost — as I’m looking at an EV, I really didn’t want a secondhand car whose battery was already partly degraded, and vehicles are still somewhat costly if you want a brand and WLTP range
• FBT benefit — buying an EV you currently get FBT savings only on electric vehicles that you can’t get if you decide you want to purchase a non-EV, this saves you thousands of dollars
• My salary — I’ve hit that bracket where doing nothing this year meant the tax man was going to lower what they’d contribute towards my health insurance, so the novated lease reduces my taxable income keeping me under this, win win
• Forced budgeting — in admittedly crappy at this and come servicing and tyres etc it was always a hit to the wallet, so novated leasing factors this into the costs every fortnight along with charging, insurance, rego and other costs

There is the negative impact imposed by the federal government requiring a 28.15% residual at the end of my five year lease, so around $17,000 payable, something you don’t have with a normal car loan, so having to keep that money set aside in the bank is a must.

I’ve also had to specify upfront my estimated kilometres travelled each year, something I honestly had no clue about as I never logged what I travelled. It will be interesting as part of my journey during this lease, and having to record these, how many kilometres I actually travel.

Interestingly, as I begin this journey into novated leasing and EV cars, the federal and state governments look to change how these cars are charged for their usage of roads. Currently, fuel-based vehicles pay a tax on fuel that goes into roads maintenance — though Australians may ask does it given the serious number of pot holes! But I digress, governments currently don’t get anything from EV users, likely because in the past numbers of were so small, but now not so and will continue to grow and replace those currently paying fuel levies. The proposal being we would need to cite kilometres travelled and pay for that usage as part of our vehicle registration.

At the end of this five year period will I feel it has been beneficial going down this non-traditional method to getting a car, as I won’t own at the end as I would have had I financed it, though I do have the option to buy at the end should I wish to. It will be interesting to see as well what the value of the car ends up being at that time, as currently they don’t seem to hold their value quite as well as regular cars, perhaps due to fear about battery degradation.