Novated Lease Vs Buying Outright

npnp on 24/01/2025 - 16:33
Last edited 24/01/2025 - 21:17 by 1 other user

Background:
40,000 km per year driving, looking to get an EV, mortgage with offset, another potential mortgage loan next year

Scenario 1: 2 Year Novated lease for new EV (i.e. 2024 Model Y for 58K)
Pros - FBT, pre-tax pay, opportunity cost/ offset saving
Cons - Ridiculously inflated ongoing costs/ insurance, balloon payment (which itself would be close to scenario 2 below), drastically reduced chance for a second mortgage

Scenario 2: Buy a used EV (i.e. 2022 Model Y for 40K) outright
Pros - Less ongoing costs, can utilise in-house solar or night time less rate electricity
Cons - Offset savings gone (around 6K over two years)

From my brief calculation, if my income were 250K, scenario 1 would have made more sense, if it's 100K or less, scenario 2 would have made more sense.

Presuming my income is 150K, what would you do and why?
Thanks in advance

Poll Options

  • 41
    Scenario 1 makes more sense
  • 18
    Scenario 2 makes more sense
  • 68
    Don't buy an EV
  • 13
    Buy a hybrid, cheaper overall
  • 6
    ICE car still makes more sense
Automotive Car Electric Vehicle SUV Tesla Inc

Comments

  • Gdsamp on 24/01/2025 - 16:45

    Salutations

  • montorola on 24/01/2025 - 16:50
    +8

    Neither.

    Buy old reliable Camry and bank the saving$$$

    • npnp on 24/01/2025 - 16:55
      +1

      I'm actually leaning towards buying a cheap hybrid which seems to make sense in lots of ways

      • montorola on 24/01/2025 - 17:16
        -3

        Well you'll be glad you did.

        Unless you wanna be one of those brand-name people who take out loans to impress others (lol)

        • npnp on 24/01/2025 - 18:57
          +1

          Living in a society one couldn't completepy get out of the social norms (of 'doing things to make an impression') but will try… Thanks

          • mskeggs on 24/01/2025 - 20:06
            +4

            @npnp: I get it, but better to set the field you will compete in, rather than just take what the marketing says.
            I cook a mean pork belly roast, wear shirts that often get compliments and my kids are useful in an emergency. I much prefer kudos for those things than “Oh, you bought that Elon Musk car, is he the one who is into Nazi stuff?”.

            With my pork belly, and shirts and kids (and other things) I have a hope of being top ten. I’m never gonna own the best car.

              • mskeggs on 25/01/2025 - 17:37
                +3

                @lew380: Lol. Leaping in front of the bullet for your master

                • lew380 on 26/01/2025 - 16:51
                  -4

                  @mskeggs: No, pointing out corporate media lies is just part of being a good citizen nowadays.

                  • mskeggs on 26/01/2025 - 18:04
                    +2

                    @lew380: Yeah, he was just waving to the crowds, and when he speaks to AfD gatherings about resisting multiculturalism he didn’t know they were far right.
                    It’s all just funny jokes to trigger the libs.

                    • lew380 on 26/01/2025 - 18:51
                      -2

                      @mskeggs: Multiculturalism is fine when it's slow and organic, allows both sides to settle in comfortably. When it's forced by mass immigration and greedy corporations trying to over saturate the job markets and crash the middle class, it's bad. Australia has only been doing mass immigration for a few years, places like Britain and Germany have been doing it for decades. Will see how your lefty feelings vanish when your living in a slum and the wages have mostly plummeted.

                      • mskeggs on 26/01/2025 - 22:01
                        +2

                        @lew380: We've been running in the top ten immigration destinations in percentage terms for the last three quarters of a century. Massively more than the UK or Germany - check your facts before you post errors. We have double the percentage of foreign born people, not knowing this is embarrassing for you.

                        Plenty of racists hated the Chinese in the gold rush, the Irish in 1900, the Italians and Greeks after WW2, the Vietnamese in the 1970s, Lebanese in the 1980s, Africans in the 2000s and now the Chinese (again!) and the Indians.
                        It's always the immigrants.to blame.

                        I personally agree we should be building more infrastructure, housing etc if we are running high population growth, like we have in past decades - I just don't start with it being the foreigners who are the problem.
                        I seem to be able to come up with simple solutions that don't require supporting AfD or One Nation.

              • niggardly on 26/01/2025 - 15:12

                @lew380: Tate, is that you Top G?

                • lew380 on 26/01/2025 - 16:52
                  -3

                  @niggardly: I'm not even mad, how your still around with that username is hilarious. Good job sir.

                  • niggardly on 27/01/2025 - 13:19

                    @lew380: I'll take the bait. Ignorance to the english language doesnt make your feeling of being offended valid.

                    And maybe dont go about calling people brokies in a website about bargains.

      • Bruceflix on 25/01/2025 - 20:54
        +3

        Hybrid, the best AND WORST of both worlds.

      • nikey2k27 on 26/01/2025 - 11:51
        -1

        best of broth worlds 36l to 770 km Yaris cross

      • gakko on 27/01/2025 - 12:03

        Yeah id dip out and go a 2019 whatever and be further ahead. Because that's what I intend to do.

    • JIMB0 on 25/01/2025 - 10:51
      +8

      Driving an old an Camry and being mortgagee free is living the dream. Parking it in front of a big fancy house is even better. Really keeps the neighbours guessing.

      • npnp on 27/01/2025 - 12:09
        -1

        I like this. A humble house and a humble car with a fat savings account that you know you could do anything with is a lot better though. LOL. With our sub-continental background, we tend to believe 'being wealthy is having more and spending less', drastically different from the Western way of thinking 'being wealthy is spending more and showing off'. Depending on how you were raised I suppose both categories equally enjoy their lives their own way so no judgments there.. Just different priorities which make different groups happy in different ways…

    • FimpBARGAIN on 25/01/2025 - 23:36

      I hear that EV resale values are not so great, maybe another option might be a 2yr old EV coming off a lease, most novated leases companies let you buy used as long as not more than 7yrs old at end of lease period

      • AnophthalmiaCervidae on 26/01/2025 - 00:18
        +4

        While you can get a used EV on a novated lease (you could also get a new or used ICE), what makes a novated lease particularly attractive is the FBT exemption that you get with a new EV.
        Without the FBT exemption a Novated Lease is not worth it for most people.
        A used EV must have been first registered or used after July 1, 2022 to qualify for the exemption.

        • FimpBARGAIN on 27/01/2025 - 11:22
          +1

          The only NL I ever had was for an Amarok with 7000km on it. I arranged to purchase from a dealer and saved more on that initial sale than I would have from FBT, got it for $28k when new they were near $40k. New car depreciation is a bitch and I keep hearing EVs are worse

        • x d on 27/01/2025 - 14:09
          +1

          The last sentence is the clincher. There are now heaps of used EV's registered after July 2022 for fbt exemption.

    • supersabroso on 26/01/2025 - 16:29
      +6

      If you actually drive 40,000km/year then the old Camry will cost you more money as you'll be spending $7,000 on petrol every year! Not to mention the fact that you'll be paying for multiple new timing belts, disc brakes, engine repairs, oil, full servicing, pink slips etc. Go with a 5 year novated lease, you want to minimise that balloon payment & delay paying after tax dollars for your insurance/maintenance as much as possible. The FBT exemption for EV cars won't last forever, it's the only thing making a novated lease worthwhile, otherwise they are an absolute rip off.

      • whyisave on 26/01/2025 - 16:46
        +2

        Go with a 5 year novated lease

        I would say that is too long, for this 'new technology' and also, for 1 "long lease".
        Breaking out of a lease, will be very, very expensive because you still have to pay the outstanding months, in the lease agreement.
        One way, is to keep renewing the lease, every 1-2 years, if you like.

        @npnp , check out AGL's "EV Subscriptions", and if you can convince your employer to arrange salary sacrifice for it:
        → https://next.agl.com.au/ev-subscription/salary-packaging

        It's not as "cheap" as a NL, but look into the sums for your sake, because you can change cars every 6-12 months, without ever needing to pay for the balloon payment, etc.

        • Aureus on 27/01/2025 - 14:31

          If the car is fit for purpose today when you get it, it will still be when the car is old and you are getting rid of it (minus a little bit of battery degradation). New tech doesn't make your tech worse.

          I would still avoid a 5 year lease, because it restricts job mobility and it is hard to plan 5 years in advance. Too many unknowns.

    • derrida derider on 26/01/2025 - 16:40
      +4

      Did you not see the bit about 40000km a year? An old (therefore non-hybrid) Camry will cost in petrol (which aint getting any cheaper).

      40000k@8l/100km = 3200l of petrol a year. At $2/l that's $6400 a year. Plus maintenance costs which even Camrys need. Net savings will be negative.

    • Jackson on 26/01/2025 - 21:37
      +1

      As someone who upgraded from an old camry, even though I did all my own servicing and it had cost me almost nothing in 8 years, it was only a matter of time (a relatively long time) before an EV saved me enough money that it was worth it against petrol alone.

      If you are doing things right you should be playing the long game by now, and 2 years as a lease is not the long game IMO

  • Euphemistic on 24/01/2025 - 17:02

    What about other 2nd hand EVs?

    • npnp on 24/01/2025 - 17:05

      Also open to that. Unfortunately not many around at the moment that have got same EV range (400 km plus) that are also significantly cheaper to make more sense over Tesla.

      • Euphemistic on 24/01/2025 - 17:34
        +5

        How often will you realistically NEED 400km range? 300km on the highway and its time for a break anyway.

        • seefu on 24/01/2025 - 18:03
          +2

          i have a long range Tesla, realistically on highway, you're looking at 400km of highway range or 500km of city range.
          I live in NT, our largest gap without a FAST charger is currently 447km. Or I can stop halfway and charge slowly.
          With a 400km range, to drive to the halfway spot, drive 188km to the halfway spot, charge for a couple hours to add 65km to your drive and then continue on.

          If I had 300km range, you'll likely end up waiting 3 hours longer for that slow charge to give you enough to keep going. 5 hours vs 2 hours. That's how I see it anyway.

          • Ade99 on 25/01/2025 - 07:37
            +7

            @seefu: …always assumes the charger is available as well as working…🤔

          • SlickMick on 25/01/2025 - 11:07
            +1

            @seefu: Either seems like a huge compromise to go EV for a trip > 400km.

            I have a PHEV, and I think this applies for EV as well, it's great for a daily commute < it's range (or one-way if can charge during day).
            For road trips, the PHEV is useless. The battery is drained within an hour and I'm on U95 for the entire trip until I get home again. I've once had an opportunity to charge overnight at a motel, so got a little bit of electic driving the following day, but basically worthless in the scheme of things.

            An EV extends the electic range substantially, but has a huge "put you life on hold - your battery is the priority now" when you hit that range.
            Unless/ until they make swappable battery packs so I can recharge in minutes at any servo, an EV is never going to suit me.

        • npnp on 24/01/2025 - 18:19
          +4

          Well, I need it every single day. My work is 130 km away from home, mostly highways. And I don't have car charger at work place. Charging on the way means, either I'm late to work or to home (I don't want to spend a second wasting my time charging the car either way). So yeah, highway driving everyday 260 km means in EV terms realistically 400 km range. Even then I will have to charge the car every single night.

          • Euphemistic on 24/01/2025 - 18:43
            +7

            @npnp: That makes sense. Lots of potential buyers 'want 400k+' but realistically drive 40km per day and 2hr on holidays twice a year.

            • npnp on 24/01/2025 - 18:58

              @Euphemistic: I understand what you mean. If I had a job in the city, I would have even considered a Nissan leaf with just 110 km range, makes a lot of sense..

          • netjock on 24/01/2025 - 20:22

            @npnp: I assume your wiring at home is up to charging 30kwh a night?

          • twig on 26/01/2025 - 21:38
            +1

            @npnp: Your use case is perfect for phev which also benefits from the FBT but you'll need to have the car in your possession by April.

            Unfortunately EVs isn't in a place where it'd make sense for your daily use

            Downside is the prices for those are quite high

            Edit: after reading some more comments, old boring hybrid (to avoid impacting new property loans) or PHEV (for NL FBT) makes the most sense since you can't make use of solar to charge the EV

      • BewareOfThe Dog on 24/01/2025 - 18:33
        +6

        Ummm, the BYD Seal?

        • Aureus on 27/01/2025 - 14:55

          Good car, but these sellers are delusional with their prices. You can get a new one for $54k drive away and the 2025 model is better.

      • whyisave on 26/01/2025 - 16:41

        have got same EV range (400 km plus)

        PoleStar 2 has decent 450+ km range, and the internal dashboard still feels like a traditional car, without needing any internet connection to use the built-in Google Maps.

        • npnp on 26/01/2025 - 21:45

          Love to have one but it's way out of my budget. If I had that sort of budget, my first pick would probably be Toyota BZ4X. Since I'm not there yet I'm looking at Tesla/BYD/MG4 options.

          • whyisave on 27/01/2025 - 03:11

            @npnp: "out of budget" ?
            Second-hand Polestar 2 is cheaper than Tesla Model Y,
            but Model Y is roomier (and probably has better resale, but depends on Internet, whereas Polestar can be driven without being online but I think for updates, you need to go back to the dealer )

  • Porker on 24/01/2025 - 17:07
    +6

    There are two Scenario 1s!

    • npnp on 24/01/2025 - 18:20

      Oops.. Corrected, thanks for pointing out.

  • areustillpretty on 24/01/2025 - 17:11
    +8

    You can NL used EVs if the car was first used/registered after July 2022, I think.

    • npnp on 24/01/2025 - 18:37

      Thanks, this would be another option, though my mortgage ability will be destroyed nonetheless. Imagine not being able to service an IP loan due to a stupid used Tesla novated lease. That would be the dumbest thing I've ever done, I won't be able to forgive myself for that later down the track.

  • Hardlyworkin on 24/01/2025 - 17:23
    +1

    Option 6; but a laptop under 2 grand for your kid and a no fee international credit card for yourself.

  • freedomofspeech on 24/01/2025 - 17:28
    -8

    Don't buy an EV!

    • Euphemistic on 24/01/2025 - 17:33
      +2

      Got any reasons?

      • TEER3X on 25/01/2025 - 06:36
        +4

        Because they are a far right wing (Amercian wannabe) dunce

        • Euphemistic on 25/01/2025 - 13:15
          +1

          Must be so confusing for them now Egon Mush is showing his colours.

          • TEER3X on 25/01/2025 - 17:36
            +1

            @Euphemistic: Confusing for me too, didn't realise he's such the p.o.s he really is.

    • Hardlyworkin on 24/01/2025 - 17:59
      +1

      Will it ruin my weekend Scomo?

    • TEER3X on 24/01/2025 - 18:13
      -1

      Username checks out

    • npnp on 24/01/2025 - 18:39
      +2

      I'd love to see your reasoning behind this (not mere I hate EV sort of thing)

    • twig on 26/01/2025 - 21:47
      +1

      Yeah, get a yank tank instead! Eat up all those tiny parking spots.

  • apple2016 on 24/01/2025 - 17:32
    +3

    When you do NL, you are not really getting any savings. Most saving go to the NL providers and the bank as interest.
    Just calculate how much you are paying to the NL and you will know how expensive this is.
    To avoid everyone seeing the actual money NL get from a lease, they always only show you the impact to your salary based on max tax scenario.
    If you have other tax deductions on your $150k salary, NL calculations could be wrong.
    Buying outright with cash is cheapest.
    If you are planning on taking a loan anyway, then you can look at NL. at higher interest rate and NL costs added, you might still be better off accounting for the tax deduction.

    New ICE car under $40k might be an option. have you considered that?

    40,000 km per year is a lot. Due you think you can charge your car that much just using solar as this restricts you to charge during daylight hrs?

    • npnp on 24/01/2025 - 18:23
      +1

      Everyday I have to drive 260 km for work during which there are no charging options. So I have to charge every single night at home. I do have solar but it looks like not that useful during the week due to car being at work. Yes, for this sort of everyday driving, I'm looking at 40k plus driving per year easy.

      • Euphemistic on 24/01/2025 - 18:45
        +5

        Maybe ypu should consider moving closer to work, or changing jobs. Thats 3h per day almost completely wasted.

        • npnp on 24/01/2025 - 18:53

          Thanks, I wish I could do that. Family home, kids schooling etc makes such decisions rather complicated.

      • derrida derider on 26/01/2025 - 16:57
        +3

        Yep, you do appear to be in the small minority where a hybrid makes more sense than a full BEV because you genuinely need the extra range.

        But I agree with others that if you want a decent lifestyle and for your kids to grow up seeing their dad then seriously think about either moving your home closer to your job or moving your job closer to your home. Even if it means a crappier home or a crappier job.

        I had a job commuting over 2 hours each way for a couple of years when my kids were little; it was only after we took the plunge and moved that I realised how badly that was screwing up all our lives. Otherwise if the nature of the job is such that you can WFH a few days a week that will work too.

    • Ade99 on 25/01/2025 - 07:40

      Buying means you will have to eat the cliff edge depreciation $$$s. If you keep it till it is dead then not such an issue but if you like to flip the cars every few years not such a good idea.

  • freefall101 on 24/01/2025 - 17:37
    +10

    Without knowing the details of your novated lease provider, it's hard to tell. But mine I pay most of the costs out of pocket and they reimburse me. I did the insurance myself, all the tyres/maintenance/rego/etc are actual cost. They have an estimate that you have to pay each pay period, but whatever is not used you get back (although you have to pay tax on it). Works really well with an EV because you can also claim power consumption as a cost (there's a calc for it) and with fixed servicing costs it's mostly just paying for the car.

    The only real killer is the interest rate on the loan, around 8%, I couldn't shop around on that. But the benefit of paying for it pretax and saving the GST by far outweighs the interest.

    The key is to really get into the detail yourself. What the novated lease people tell you is rubbish. You'll also get a thousand comments on ozbargain about how novated leases are a scam without really knowing anything about them. Definitely worth finding out who your provider is at work and getting a quote from them before making any decisions. Just pay close attention to what the actual costs are you're paying for.

    • npnp on 24/01/2025 - 18:55

      Thanks mate, I will definitely do this.

      • kmanccr on 26/01/2025 - 23:13

        Yes. For scenario 1, the costs aren't inflated, they are exactly the same as if you did it yourself but are all pre-tax! the provider includes them in the quote to show a pre and post tax amount to understand the benefits. That amount is deducted in your salary and unspent amounts just build up in your account and you can use it for insurance/tyres/service as you will.

    • meetjeremy on 26/01/2025 - 11:02

      I second this.. getting into details of NL. I got most of the things to be done by me and then reimbursed. Default thing like tyre, rego.. NL will take care.
      I find NL to be more beneficial till you are in terms of NL and not planning to borrow for the period of the lease.

  • 1tightwad on 24/01/2025 - 17:52
    +7

    There's a very useful Novated Leasing calculator on r/AusFinance - https://www.reddit.com/r/AusFinance/s/IyyySLahQe

    • npnp on 24/01/2025 - 18:25
      +1

      Thanks, I got that and did the calculation. It seems in my case the potential second mortgage plays a big part (with a novated lease I'm completely eliminating the possibility of that as my borrowing capacity will get a massive hit).

  • Make it so on 24/01/2025 - 18:09
    +3

    Other factors: do you have solar on your roof such that you can recharge at home for 'free'? Which state are you in and which other incentives do they have? For instance, in WA you get a $3.5k rebate, even for leased.

    I'm looking at these things myself, and with insurance and rego going up so much, even for ICE cars, I find that the purchase cost really isn't the only thing to look at. Insurance, rego, repairs, tyres, fuel/electricity etc. add up to a huge amount over the life of the car, and if you can salary sacrifice those then that's a big saving.

    • npnp on 24/01/2025 - 18:32

      I have solar but pretty useless in my use case as the car will be at work during the day time. Other costs (maintenance and tyres etc) aren't really different between ICE and electric cars (for an example my corolla hybrid costs only $250 per year) this is even cheaper than some of EVs (with less mechanical parts) across 5 year warranty period. Any EV related benefits (rebates, fuel savings etc) will be absorbed by the ridiculous depreciation. For example, my corolla would depreciate from 40k to 25k in 5 years where as a potential Tesla drop will be from 60k to 30k for same time /mileage. That 15k extra loss with EV outweighs any benefits. So financially a hybrid makes more sense, but admittedly I do love the instant EV torque.. lol

      • Euphemistic on 24/01/2025 - 18:48
        +3

        How do you get away with $250 per year if youre doing 260km every day for work. Thats over 60k km per year. Thats more like 4 services of $250.

        • npnp on 24/01/2025 - 18:50

          That's true as well. You are absolutely right.

        • Make it so on 24/01/2025 - 23:13

          I don't know if any car that has such cheap services, especially if you take time between services into account as well, not just km. Dealers charge so much nowadays. A good set of tyres is $700+, and lasts maybe 50k. And then there's the repairs, because every car has something.
          Sorry, I'm not too convinced by the numbers.

      • BewareOfThe Dog on 24/01/2025 - 18:50
        +3

        I charge at night.

        We have Ovo, and rates are 8c per KW/H between Midnight and 6AM. Please make sure your smart meter is Smart enough, to cope with this rate(regardles of provider). We made this mistake, and were paying a lot more than we should have been. SM upgrade is free, but may take 2-6 weeks.

        We have a Zappi charger which is capable of 22KW/H, but my BYD Atto3 charges MAX at 7KW/H

        • npnp on 24/01/2025 - 18:54
          +1

          Thanks, is this 7kw limitation is due to BYD or your home supply? Had it been a Tesla would you have been able to get full 22 kw? Thanks

          • BewareOfThe Dog on 24/01/2025 - 19:17
            +2

            @npnp: It's a limitation of the BYD Atto3 I own, (which is last years model). Max charge rate at home is 7KW per hour. It may seem limited, but, the battery is 60KW. Depending on your constant speed, I usually get @ 350km-400km per full charge, depending on speed. So, if you get home, and you are still at 40%, you will be at 100% by 6am. You can set this in the BYD App.

            I use mine for Uber, and it's good for 7-8 hour stints.

            If I do a 12 hour shift, I usually have to stop and charge on a fast (reliable) charger, so I'm back on the road in 30-40 mins. My model/series, regrettably is incompatible with most Tesla chargers, which given the only chargers between Newcastle and Sydney at Tuggerah are Tesla….I can't use them.

            So if I do goto Sydney I use one of the BP/Ampcharge units on the North shore.

            Have a Pie or snack, whilst waiting. ;)

            I was going to test drive/buy a Tesla, but I sat in both an Atto3 and Seal. These are Premium units on the inside. The Atto3 at the time suited me better, and I loved the Seal. However there was a 4-6 week wait on the Seal. I needed a car quick, and being a Muso, an SUV suited me better (and the colours were better for Uber).

            On a side note some of the newer BYD units support Tesla.

            Also, remember both BYD and Tesla are both built/made in China.

            Also Tesla is like iPhone, some major components come from BYD (Samsung's biggest customer is Apple).
            Ironically, when you drive through most Tollways in Sydney, that involve a Tunnel etc; they were built by Samsung, using their machinery, and they get a share of the toll.

            • BewareOfThe Dog on 24/01/2025 - 19:29

              @BewareOfThe Dog: If you think that you can live with the 7KW option, I would suggest just buying one of these chargers. We thought that the 22KW charger would future proof us, but when V2G/V2L charging units start to get way cheaper than the 10k price they are now, this would be way more beneficial down the line.

              Imagine getting home, and using your Car battery to supply, power back to the house, especially during that Peak Period of 14:00-20:00 during the week? Then come Midnight, start charging back up.

              I hope this is food for thought.

              Also, bear in mind, you may use tyres more than usual with an EV, but no worse that my EA Falcon Station wagon, ;)

              • npnp on 24/01/2025 - 21:14

                @BewareOfThe Dog: Definitely some food for thought.. Thanks for sharing mate.

          • airzone on 27/01/2025 - 10:08

            @npnp: Btw while the Tesla was charger can supply up to 22kw, a model 3/y onboard charger is only 11kw max on 3 phase, or 7.4kw on single phase

  • BewareOfThe Dog on 24/01/2025 - 18:45
    +3

    If you pay heaps of tax, which you appear to do, than Novated Lease will work out better for you, but you will be locked into that job for the lease term, as I discovered. I did a 5year lease with my Employer. The Employer tax savings they promised were like the Sale of the Century (Thanks Gerry).

    So I Committed, and soon found out that, it was not really that beneficial.
    Covid hit, then I had a few paycuts. I applied for numerous jobs, and when I had my 1st Interview, when I would ask about Novated leasing, they were like 'What is that'?

    I was stuck working a low paying, unhappy job longer than I wanted. :(

    All the best with your decision.

    • npnp on 24/01/2025 - 18:53

      Thanks for sharing your experience. I will definitely keep this in mind.

    • lunartemis on 26/01/2025 - 12:55
      +2

      I changed my employer midway through my NL. You just have to organise it with your new employer to set up/continue your NL

      • BewareOfThe Dog on 26/01/2025 - 19:07

        Ubnfortunatly, my potential new employers had no idea, what a Novated Lease was. Maybe I should have said it was like 'Salary Sacrifice'?

      • npnp on 27/01/2025 - 10:33

        Yes, not all employers support these leases. Most big players have their preferred leasing companies, so your old one might not work. Lot of smaller employers may not even want to engage in the scenario.

        • lunartemis on 27/01/2025 - 10:56
          +1

          I actually had to change my leasing company as my new employer used a different one. It was relatively painless in the end

  • djesr on 24/01/2025 - 21:05
    +1

    I'm in a similar spot as you, we will need to get a car (current car on its last legs) and most likely Will be financing it (not enough cash to buy).
    Spoke to our works novated leasing company, initial quote I was given had 10% interest on it.
    We get shafted by having to pay interest on the whole value of the car even though we have to pay the balloon amount at the end of the lease period.

    I think best option is to get the EV/PHEV with a novated leasing for a 5yr period. I'll be paying the most interest in that scenario but at least all of that comes out of pre tax. Abd the balloon payment will be smallest. Therefore lease amount of Gst.

    Leasing company makes the most amount of money, I get a car and the government gets less tax. Satisfaction in that order

    • npnp on 24/01/2025 - 21:17
      +1

      This is true but having an investment property is a big ticket item and I just can't let it lapse due to a silly car loan. So 5 year lease is definitely not feasible in my case. Besides I won't probably be locked in with the same employer for that long anyways. It's either 2 year lease (postponing IP for 2 years) or buy used Tesla outright.

  • djesr on 24/01/2025 - 21:08
    +1

    Correct me if I'm wrong, but the best financial outcome for you, if NL an EV, is to go for the longest period? Due to the FBT savings?
    FBT is 20% but the NL interest rate will be below 10%?

    • npnp on 24/01/2025 - 21:19

      How about the losing opportunity to get an investment property during that 5 years (loosing probably a couple of hundred thousand dollars of potential capital growth) due to me being locked in a novated lease? (As you know 60K novated lease will result in potential decreased loan serviceability of 200k plus).

      • djesr on 24/01/2025 - 21:32

        I guess you need to workout your properties. If you NEED a car now you NEED a car. A car would be a short/medium scenario where as a IP would be a long term asset.
        If the second mortgage is for an IP wouldn't the bank consider the rental income. Which would offset the negative cash flow you have with the NL

        • npnp on 25/01/2025 - 01:53

          I already have a hybrid car. This is sort of 'want' rather than 'need'.

          • Grunntt on 25/01/2025 - 17:32

            @npnp:

            I already have a hybrid car. This is sort of 'want' rather than 'need'.

            If you don't actually have a need for the car then it's easy, sort out the IP first and then give more thought to the car.

  • Gdsamp on 24/01/2025 - 21:19
    +2

    40,000 km per year driving

    Toyota Hybrid

    • npnp on 24/01/2025 - 21:21
      +2

      I already have one, I'm actually leaning towards keeping that without going for EV. Toyota warranty is for unlimited km which is another plus. There are not a lot of EVs with unlimited km (besides GWM Ora which I'm not sure will stay for that long to honour the warranty in the first place).

  • t0087669 on 24/01/2025 - 23:35

    Will getting novated lease affect getting like a home loan approved in the future?

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