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

  • 47
    Scenario 1 makes more sense
  • 22
    Scenario 2 makes more sense
  • 76
    Don't buy an EV
  • 13
    Buy a hybrid, cheaper overall
  • 8
    ICE car still makes more sense
Automotive Car Electric Vehicle SUV Tesla Inc

Comments

          • 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?

    • npnp on 25/01/2025 - 01:35

      Yes of course it does. In fact this is one of my biggest fears. Let's say your current serviceability is 700K. After getting 60K novated lease, your serviceability will drop to 450K just like that. And you will be stuck with that for 5 years. Now that sucks big time.

      • Grunntt on 25/01/2025 - 17:34
        +1

        your serviceability will drop to 450K just like that. And you will be stuck with that for 5 years.

        Then it sounds like the decision to delay the 'wanted not needed' until after the property purchase is pretty simple.

  • doptimal on 25/01/2025 - 00:23
    -3

    Novated leasing = Scam
    They muddle the numbers until you have no idea what you're paying for anymore
    Costs almost the same to go to your bank and ask the teller for a $50k car loan

    • djesr on 25/01/2025 - 07:51
      +2

      Yes scam to an extent.
      Rips off the tax man more, we are better off NL in certain circumstances.

    • npnp on 25/01/2025 - 10:39

      It depends on how you define 'scam'. Yes, they make ridiculous profits compared to many other 'middleman' scenarios which I personally hate. But if you could just forget about what the leasing company gets (which is upsetting if you go into details) and just focus on your own financial benefits, then it may make sense in certain scenarios. In very general terms, you're diverting your tax into the leasing guy's hand instead of ATO. Depending on who you hate the most, you could make a decision as well LOL. I personally would rather pay ATO (which will at least end up in public hospitals, center link, childcare etc) rather than a private leasing company which will end up with an inconsiderate billionaire…

    • FimpBARGAIN on 25/01/2025 - 23:31
      +1

      Keep asking for the real number and don't sign until they lay them out in the format you want them in.
      Then keep every email, they will try to screw you any chance they get from my experience. Eg If you put away money for tyres but don't get them fitted, you are owed that amount subtracted from the buy out figure.

      Only thing keeping novated leases alive is the government incentives to try to get new EVs out there. But looking online it looks like a lot of those incentives are closing up too.
      Dont forget that banks are offering "green" loans for certain cars which might be worth looking into

  • Drumadd on 25/01/2025 - 09:10
    -4

    Synthetic fuel is around the corner for ICE. Don’t buy a EV

    • npnp on 25/01/2025 - 10:34

      Never heard of this before (perhaps I've been living under a rock lol). Even if this is a viable option, existing ICEs won't support it will they? Fuel filters, engine itself etc aren't designed for that, it'll be a really interesting trend to watch.

  • changyang1230 on 25/01/2025 - 09:57
    +6

    Spreadsheet guy here. You are obviously very astute about the global picture of your personal finance and have mentioned a few times about the impact on borrowing capacity.

    Depending on how urgently you want or need that EV, a viable option 3 is “get the investment property you want first; then NL the EV”.

    The difference is that for whatever reason, the borrowing capacity impact after EV NL is worse than your leasing capacity impact after getting that IP loan. From my limited understanding, many banks apparently use the pretax figure of your lease to work out the borrowing capacity impact which is more inflated than what the true out-of-pocket number would have been calculated at.

    • defaultess on 25/01/2025 - 10:26
      +3

      Agree with this approach.

      I would then still seek out a lightly used second hand EV that I can NL to maximise savings. By the end of 2025 there'll be a lot of second hand Model Ys as enthusiasts upgrade to the new model.

    • npnp on 25/01/2025 - 10:31
      +1

      Thanks, I loved your spreadsheet, excellent job there, highly detailed and comprehensive. Sharing this is much appreciated. If I end up buying an EV, I'll be sure to use your reference mate.

      One thing I didn't like about the calculation was the inclusion of selling the existing car and throwing that cash into the calculation' which made 'buying an EV' option look a lot better than it should have. Anyways, all links are transparent so one could edit the links and find out exactly what's going on regardless.

      Yes, it's funny how banks are willing to give out car loans but very strict on property loans (which makes sense when you consider the longer loan durations and amounts etc.) One is an appreciating asset and the other the opposite. I really like EVs and am tempted to own one but I'm still on the fence 'do I really want to do this with the expense of some really lucrative long term capital gain sometimes in the future'. Like you suggested, perhaps delaying the car lease until I sort out the IP would be the ideal solution.

      • changyang1230 on 25/01/2025 - 10:41
        +2

        Could I get you to elaborate on why cash into the calculation makes EV better than it deserves?

        Are you suggesting “cash back from sales of old car” in section 2.1 is not applicable for those people who get a new EV without selling an old car?

        If that’s the case then yes indeed you will have to modify it to reflect the genuine cashflow. Apologies that I haven’t changed it for people who are getting an additional car instead of changing old for new; unfortunately being a spreadsheet instead of a more flexible application it’s rather hard for me to allow all sorts of different scenarios, so I went with the most common one.

        If you are doing EV-via-NL vs EV-via-offset calculation the difference will remain the same but you do have to ignore the “cash back from old car” if you are looking at the absolute change in cashflow.

        • npnp on 25/01/2025 - 10:49
          +1

          Yes, that's what I meant and I did exactly what you suggested above to get absolute change in cashflow. Again, it's an amazing spreadsheet (with a lot of hard work put into it) and a very kind sharing.

    • whyisave on 26/01/2025 - 16:47
      +1

      Spreadsheet guy here.

      😂

  • gwong on 25/01/2025 - 14:34
    +1

    BYD is cheaper for the lease option

    • npnp on 25/01/2025 - 20:22

      Yes, not sure whether I like the looks of BYD cars though (with only exception of blade which is just as expensive as model 3/Y).

  • Chewy2221 on 25/01/2025 - 16:53
    +1

    I'm not sure if "vehicle to grid" V2G is available in your area, but this would change the economics considerably. The EV powers the house during the evening (expensive) peak period & the EV is recharged after midnight . Good luck with your deliberation

  • Kiro on 25/01/2025 - 16:54
    +2

    Balloon payment, so many people fall for this and don't understand what type of wall they will walk into.

    • npnp on 25/01/2025 - 20:19
      +1

      True, for example what I found out is that if I do a one-year novated lease (due to my specific circumstances I'm not keen on longer leases), then the balloon payment would be similar to the price I'd pay for a used EV now. In other words, after paying through the nose for Novated lease for a year, I'm back to square one with scenario 2 above. LOL

  • snapper17 on 25/01/2025 - 17:00
    +1

    personally I would buy a relable japaneese car used in good condition.

    If you must go down this path you can consider doing an operating lease. Effectivly you can salary package the car without paying the finance fees and still pay for the expenses with pre tax dollars

    • npnp on 25/01/2025 - 20:20

      Didn't know about this option, I'll do some more research on it. Thanks

      • changyang1230 on 25/01/2025 - 20:29
        +1

        I briefly looked at this kind of lease eg those offered by Origin.

        You get good flexibility (you are allowed to swap out of the lease at any point with no penalty) but juxtaposing the cost with traditional NL you end up paying more for equivalent stuff.

        So I guess it’s a trade off of flexibly vs cost.

        • npnp on 25/01/2025 - 20:39

          In my use case, flexibility is important as I need to get out of the mess if I need to get a mortgage loan or change job for example. Does this need to be done through employer as well (to get 'pre-tax benefits' which is the main reason for all this drama)? In that case I need to find out whether my employer actually supports this.

  • TightAssDude on 25/01/2025 - 19:14
    +1

    My NL costs me $40 per fortnight more then my much loved 2015 Camry [zero debt] (had an accident).

    In addition to the pre tax savings on insurance and rego, the zero servicing costs and 4.3c claim per km driven means I've spent zero in energy to drive 8k.

    Camry cost a bomb in fuel, etc… 80 per week min in fuel.

    EV is a model 3

    • npnp on 25/01/2025 - 19:36

      Thanks for your input mate. Novated leasing of ICE car vs EV is a no brainer comparison. If I'm compelled for a novated lease, that would definitely be an EV. But, the question here is, for someone who's got cash to buy, also not in the highest tax bracket, also with hope of a mortgage in recent future, is it really wise to go for novated lease even for EV? I want an EV but it's not a necessity, I can live without one. But what I'm loosing by going for a novated lease is too much. If I keep driving my hybrid, it'll probably set me back 10K in fuel over 2 years but novated lease will cost me a lot more than 10k considering my specific circumstances.

  • npnp on 25/01/2025 - 20:33
    +1

    Just a quick update on a couple of test drives I did today. I tried GWM Ora, MG4 Excite and Model Y. Below are my thoughts/observations.

    MG4 was the most impressive ride out of all three especially given its price point (very quiet and comfortable, great build quality, has got traditional car controls unlike minimalist Tesla). Tesla came close second, though the build quality I felt was not as good as MG4 (the door closing sound for example wasn't as nice). The ride was rough (more sports-oriented which I don't like personally - I expected a comfortable ride for a family car, model Y was anything but a comfortable ride), cabin noise was higher compared to MG4 and the lack of physical controls was PITA (seriously, I love the minimalist design but Tesla has gone too far with it). I absolutely love the external looks of Tesla though, really nice futuristic design; despite having higher build quality, I felt the MG4 design wasn't as cool. Ora was just OK. The cheaper price and 10-year unlimited km warranty are probably the only compelling reasons to go with that car.

    What are your thoughts on the above observations?

    • whyisave on 26/01/2025 - 16:56

      My first EV experience was in an MG4 Excite (for 2 whole days),
      and then test-drives in Kia EV5 | EV9 | GT6 , Tesla Model Y [LR | P] and Polestar 2 | 4.

      MG4 is nice, zippy and inside feels cheap, and it could use more control buttons.
      It did not have any built-in maps and I needed a phone to use Android Auto
      (I like cars that don't need to rely on a phone ).

      Kia EV5 is great.
      Tesla Model Y is roomy, but the regenerative braking still needs more time, as it made me nauseous.
      There were some differences with Long Range and Performance, with regards to suspensions and handling.
      (Tesla lack of controls is not for me, ie. just a single tablet-screen)

      PoleStar 2 was overall good, as it was simple, clutter-free, traditional dashboard.
      The seats were crampy at the back, but control of the car is great.

      PoleStar 4 was a very good driving experience, but big drawback is the having no back clear windscreen, and needing to rely on a camera for the rear-view mirror was big negative for me.

  • BHR on 25/01/2025 - 20:37
    +2

    Novated lease wins at $150k but mostly from the high kilometres and packaging rego and insurance.

    Kilometres reimbursed at 4.2c/km but off peak charging costs me 1.28c/km

    Rego and insurance *0.61

    The novated lease interest rate often much higher - Maxxia currently 10.67%, so if your mortgage is 6.5% or less scenario two wins here.

    You can lease a used EV.

    If you're remortgaging a novated lease severely hampers your borrowing power

    • npnp on 25/01/2025 - 20:42

      Really appreciate the numbers.. Are you saying novated leasing company will reimburse based on actual km driven not the cost of charging. In which case, if I do a lot of km, I can even make some money (though not that much lol. perhaps $1,000 per year).

      • changyang1230 on 25/01/2025 - 21:52
        +1

        Yeah it’s reimbursed at 4.2c/km as tax deduction rather than a full refund.

        So say your bracket is 37+2% (Medicare levy), the effect is that you get 4.2c * 39% = 1.638 c/km back through the tax deduction process.

        Indeed, if your net electricity expense is less than this figure, you end up making net profit in the charging-and-driving process, a quirky outcome of the km-based reimbursement system.

        (My spreadsheet does go through this calculation as part of the running cost churning)

  • eddyah on 25/01/2025 - 20:49
    +2

    40000kms a year + you have 3 phase and can charge at home?

    Yeah get an EV. You'll save a shit load in petrol every year.

    Go for scenario 2 a second hand model Y so you don't cop the depreciation hit.

    130kms each way on the highway you'll love auto pilot doing most of the work for you.

    Sorry but everyone elses opinion sucks here and they're misguiding you.

    • npnp on 25/01/2025 - 21:06
      +2

      Thanks mate. I test-drove model Y and MG4 today (both slightly used demo vehicles) and MG4 was compelling and I thought the build quality was better (i.e. Tesla door closing sound was terrible, cabin noise was worse as well) and MG4 ride was smoother/ more comfortable as well (Tesla, despite being a family car, had a very rough ride - I felt like riding a utility vehicle LOL - I think I'm very used to Toyota ride comfort). I love the look of Tesla but hated the lack of physical controls and no display in front of you. Basic autopilot features were pretty similar in both cars (active lane centring and radar cruise control, road sign recognition etc but I liked MG4 implementation better due to the more traditional button setup. I believe Tesla's basic Autopilot isn't as good as Toyota Safety Sense 3.0 (which my current Corolla Cross has) but I don't want to pay extra for the full autopilot, I think the basic one will be good enough. Decisions decisions.. Either way, it'll be a second-hand EV, most probably MG4 due to better build and ride comfort (and cheaper as well - icing on the cake).

  • Ooops on 25/01/2025 - 21:30
    +3

    I do like evidence based opinions. Lets do some math over 40k km.

    Non-EV, with an average consumption of 8.5L/100km, and assuming fuel prices of $1.8/litre

    • 40000 * 8.5 / 100 * 1.8 = $6120 (fuel alone)

    EV, with an average consumption of 15kWh/100km and a 14c/kw charge rate (assuming you charge at home and at night all the time).

    • 40000 * 15 / 100 * 0.14 = $840 (even lower if you have solar)

    If you buy an EV today and drive 40.000 km/year for the next 5 years, that's $30.000 in savings from fuel alone. Add to that cost of servicing an ICE car. If you get an EV and sell it after 5 years for $15K and it was basically free. On that basis, buy a BYD, a bit more cheaper and probably more comfortable and you have yourself a bargain.

    • npnp on 26/01/2025 - 07:10
      +1

      Thanks for the factual comparison. Based on your method but with my hybrid (which does 4.2 L/100 km);

      Hybrid fuel cost per year $3,000
      EV electricity cost per year $900
      (I have solar but can't use as the car is at work during the day)
      Hybrid service per year $700
      EV service per year $0

      Total running cost for Hybrid over 5 years $18,500 vs EV $3,500
      Seems I'm $15,000 better off by buying a Tesla.

      BUT, when you consider depreciation, matters change quickly in Hybrid favour.

      Toyota Corolla Hybrid Purchase Price $40K
      Tesla Model 3 Purchase Price $55K
      After 5 years + 200,000 km on the clock,
      Toyota resale value $25K
      Tesla retail value $20K (perhaps even less)
      ** Note Toyota would still be under unlimited km 7 year warranty

      Let's compare total cost after selling the car;
      Toyota $30,000
      Tesla $35,000

      So yeah, Hybrid still makes more sense BUT I think EV driving fun with instant torque will definitely be worth the above $5,000 extra… Lol.

      If I buy a cheaper EV or a used EV then above figures with definitely change for EVs favour. For example, with an MG4, it'll even be cheaper to have the EV compared to Toyota hybrid.

      • Parasite on 26/01/2025 - 09:26
        +3

        I doubt anyone is going to pay $25k for a 5 year old Corolla with 200k on it. Especially now the used car market is returning to normality.

      • serpserpserp on 26/01/2025 - 10:06
        +1

        Tesla retail value $20K (perhaps even less)

        lol please show me these mythical 5 year old Tesla's that are under 20k. I'll buy two of them tomorrow if you can.

        ** Note Toyota would still be under unlimited km 7 year warranty

        Your Tesla works still be under warranty for the battery. If you buy an Xpeng G6 today for a similar price as the model Y it would be under a 10 year warranty for everything.

        • npnp on 26/01/2025 - 10:21
          +1

          Don't forget it's a 5-year-old Tesla with 200K mileage on it which means both its manufacturer warranty as well as battery warranty are no longer there.
          With Toyota however, it's an unlimited km 7-year warranty for the Car and an unlimited km 10-year warranty for the battery.

          There is a 5-year-old Tesla in Perth (facebook market place - search up yourselves), which the seller has been trying to sell for over a month now (I know as I went to see this car), which only has 70K mileage on it for $32K. And don't forget, he would have paid over 70K for it 5 years ago and I don't think anyone would offer anything above 30K for it (otherwise the car would have been sold by now). That's 40K depreciation in 5 years for only 70K mileage (still under warranty). Imagine if that Tesla had 200K mileage on it without any warranty. I think he'd be lucky to get 20K for it.

          Having said that, these dynamics may change in future.

          Hybrids still enjoy a decent demand but it'll probably fade with the intense EV competition at attractive prices. Hence depreciation of those could perhaps be just as bad as EVs. On the other hand, EV depreciation may get better once people are comfortable with the fact that batteries will last a lot longer. With this sort of changed dynamics, the above figures could vary. But I don't have the crystal ball to say that is going to be the case thus can only guess based on what we know today.

          • defaultess on 27/01/2025 - 10:45

            @npnp: Not sure that's a valid reference point and definitely not one I'd be using to project into the future.

            Three things skew this.

            1) NL FBT benefit means that for a mid to top tax earner you're comfortably saving 10-15k. Off a brand new Model 3 that goes for about $61k that brings it down to $46-51k vs $32k for an older model. Without the NL benefit I think he's priced it fairly.
            Then you cross shop against a brand new mg4 with NL benefits and a decent drive and its easy to see why he hasn't been able to sell at that price.

            2) on the depreciation angle, none of us have a crystal ball but Tesla's have had some massive price cuts since they first arrived. I still think with the build quality and profit margin they have they can drop another 10k off the current price, as can their Chinese competitors (based on China prices) but it's not likely a Tesla will cut another 30% off its sticker price. Other non Chinese brand EVs I think have a decent amount of room to drop.

            3) the ICE & hybrid second hand market is ridiculous right now and goes against all the long term data. You can't assume it will remain this way in 5yrs and a reversion to the mean is likely.

            I'm someone who just this month bought a very lightly used second hand EV and have been in the market for a car for the last 5-6 months and have spent a lot of time on carsales.
            For all the talk of terrible EV second hand values, it's mostly compared to Tesla prices when they first came out. I didn't really stumble on a decent bargains vs new. I found the best deals to be had are on the EV6 but that's above your price point.

            As the first round of 3yr leases finish in EV land we might finally see some good deals in the second hand market and hopefully extra competition and falling battery prices will also push prices further down.

            • whyisave on 27/01/2025 - 20:44

              @defaultess:

              3) the ICE & hybrid second hand market is ridiculous right now

              Do you mean, the are 'over-priced' or 'under-priced' ?
              ( or not selling quickly enough? )

      • Ooops on 26/01/2025 - 17:17
        +1

        Assume you can sell the ICE/Phev car in 5 years time. Lots can change, and not in the internal combustion's favor.

        • npnp on 26/01/2025 - 19:03

          True

  • Salternative on 25/01/2025 - 21:33
    +1

    Novated lease affect your borrowing capacity for sure , as the gross amount of the lease will be deducted from your salary, EV lease will affect it less, as its all pretax income , wheras ICE has post and pre tax components , and will more severely affect the borrowing capacity.
    Reading between the lines it seems like you are seeking a bit of confirmation bias as you want a NL EV .
    My advice is speak to your bank/ broker to see how the NL repayments will affect your borrowing capacity , if they affect it to the point of making the investment prop unfeasible , then buy the investment property first and then do the NL , ( EV's are consistently getting cheaper and better so holding off might not be a bad thing).
    With your KM's , EV on a NL will work out better for you , if you want a new car . A consideration would also be if with the K's you do for work ,if you are compensated for that by work ( as in you are in sales/service and the K's are to meet clients etc ). In that case it will make for a nice double dipping for you .
    If you have young kids in childcare or are receiving FTB A and B, you need to consider that NL will increase your ATI ( adjusted taxable income)
    If you plan on buying a new EV regardless, novated lease would be more beneficial than buying outright .

  • serpserpserp on 26/01/2025 - 09:59

    Buy a used EV (i.e. 2022 Model Y for 40K)

    Where are these mythical Model Y's for 40k?

    • npnp on 26/01/2025 - 10:36
      +1

      https://www.facebook.com/marketplace/item/925038726407005/?r…

      This one is sold now but when I enquired he agreed for 41K (I offered 37K which he declined). And this car is 2024.

      • serpserpserp on 26/01/2025 - 22:27

        Wait so he agreed 41k (still not 40k) and you didn't buy it? So maybe he sold it closer to the 45k he wanted.

        Still yet to see a 40k or under Model Y

        • npnp on 26/01/2025 - 23:21

          I said 2022 Model Y for 40K (which in my opinion is expensive)
          The car in the link is 2024 Model Y that I could have bought for 41K.
          No, he did not sell for 45K that's for sure and the ad was there for few weeks with 45K on it.
          Then again, model Y ride was so rough, I didn't really like it (for that price anyways). I offered 37k based on that lol.

      • whyisave on 27/01/2025 - 20:46

        That's a Model Y RWD, right ?

        The Long Range is better value, with a bit more range, but obviously pricier.

  • May4th on 26/01/2025 - 11:57

    you can still NL an used EV as long as it's post 2022, preferably from dealer for GST exemption.

    dollars and cents wise you will definitely come out ahead with NL an EV (we are factoring depreciation into this consideration which has too many variables) but it will put a dent into your borrowing capacity.

    I'd probably try to negotiate a good deal on a 2-3yo Tesla cash purchase if you want an EV as the resale value is cratering if borrowing capacity is a concern

  • 80kinvestment on 26/01/2025 - 17:33
    +1

    Do your own maths, but for us the novated lease on an EV worked out close to even with buying in cash up front (after tax incentives, rego, insurance, etc). The main advantage being just that you have more liquidity.

    For 40kkm a year you’re going to be way better off with an EV. The newer batteries are rated for close to 10000000km (they degrade more over time than use). And maintanence is pretty much just tyres (regen brakes do most of the stopping so you don’t even really have to worry about pads). Honestly with used prices like they are an old Camry would cost more over 5-10 years.

    We also found BYD, MG and Tesla were the only brands that didn’t just whack on a 20k EV premium on a hatchback.

    • npnp on 26/01/2025 - 20:20
      +1

      Well, EV car makers may not have a massive premium on-top now but they certainly did a couple of years ago. Tesla's were 70K plus which are now 53K plus (that's 20k drop right there even with very weak Australian dollar at the moment) so yes, they certainly had massive profit margins. I'm glad that everyone is on price reduction pressure now thanks to Chinese EV competition.

      • 80kinvestment on 26/01/2025 - 22:12
        +1

        I don’t know how much was profit gouging vs costs dropping (AU Teslas are made in China with BYD blade batteries now). I think China is the only country that’s really hit the manufacturing efficiencies that let them sell a solid family SUV for around the same as an ICE build. Hyundai and Volvo are putting forward good offerings but the prices are still jacked up like it’s 2020.

  • dannyboi on 26/01/2025 - 21:06
    -1

    I would suggest getting a good used 2-year old hybrid outright. That way, it'll still have some way to go with warranty and would have lost most of the early depreciation.
    Alternatively, get an EV with a lot of warranty still remaining.

    I went with Scenario 1 myself but for 3 years. It has been good when compared against buying a car via finance. However, you are still taking on an additional debt at the end of the day. I had always wanted an EV, so this was the best option for me at that particular time.

    For Scenario 2, you might take on a bit of risk with respect to remaining warranty if it's a Tesla since the main warranty is only good for up to 4 years or 80,000 km. Might be ok if you can get a low kilometre example. With respect to the home charging savings, you can also claim a 4.2c per 100 km allowance in Scenario 1 so long as you can split the commercial and home charging invoices somehow or alternatively forfeit the ability to claim commercial charging invoices.

    • npnp on 27/01/2025 - 10:37

      Out of curiosity, if I go with a novated lease, and exceed the warranty inclusion no of km (say 200,000 km within 5 year period) and then if something happens (major repair or battery issue), will they (novated lease) take care of that (since they're the technical owner of the car and should ensure that's its running order for me)? Apologies if this is a stupid question.

      • 80kinvestment on 27/01/2025 - 18:34

        You’re the owner of the car. The word “lease” is confusing, but it’s just secured finance.

        • npnp on 27/01/2025 - 20:19

          Does this basically means that if car had any manufacturing fault or battery issue out side warranty (above 160K) then I'll end up still paying rest of the lease payments as well as the balloon payment at the end? Though very unlikely scenario, that sucks..

  • squaredonut on 26/01/2025 - 22:06
    +2

    I would say neither right now, or maybe until your second mortgage fiasco is sorted. Most personal/car loans the rates are pretty high, and the banks would likely look down on it overall. So I would say if you got something to drive still use it and focus on that second mortgage first then once that's done you can into a new car or whatever.

  • Some Guy on 27/01/2025 - 16:55
    +2

    I and two mates looked into this. Two mates pay lots of tax; one runs his own biz the other earns $350k+/yr. I'm on $150k plus super. Numbers crunched. Worth it for two mates due to high taxes paid and FBT exemption (for Model Y at $58k). My accountant said pay cash (ie take out of mortgage OS) and sal sac into super instead to get same nett position. The NL guy was also a massive PITA and didn't want to answer questions about GST, inflated prices etc - "Just look at the calcs that show you get a big tax refund".

    • npnp on 28/01/2025 - 00:01

      This is my conclusion as well. Especially when I intend to buy a used EV for cheaper, not in the highest tax bracket and have got enough cash, going for a novated lease makes less sense, especially for a shorter period. Of course, Leasing guys tell you otherwise (we all know how much they care about saving our money - it's a pain for them to watch our money go to waste… Such kind people).

  • paloverde88 on 27/01/2025 - 17:46

    doesn't Ev has almost nil resale value? think a perfect looking laptop but the battery has been charged a kerzillion times.battery health 40% just after 3 years (the laptop that is) except laptop battery are cheap to replace u can get third party. But Tesla battery for the car? Isn't it like 3/4 of the showroom retail price of the actual tesla itself?also most of their tyres are like 20" so replacement tyres are also a very big concern - insurance are also very costly unless the regulators step in. Apparently it is very high risk for the insurance if you drive an EV

    • npnp on 28/01/2025 - 00:11
      +1

      Saying EVs have almost nil resale value is a bit of a stretch. Yes, they don't hold value as much as other cars (at this stage anyway). Laptop battery chemistry and car battery chemistry aren't a good comparison. Even 12V batteries in cars need replacing every couple of years, then you could have argued that as well. But those battery types aren't the same. I have driven many hybrids. My last Prius (which I loved dearly and used for close to 10 years) had 240K when I sold it and the fuel economy was only slightly degraded over the years. That's the original main hybrid battery. But I have changed 12V battery of the same car about 3 times over the years. Prius hybrid battery is Nickel Cadmium (which degrades much faster than Lithium iron batteries current EVs mostly use). If my Prius lasted 10 years with no issues, I can reasonably presume that Teslas would last twice as much.

      Your other points however (tyres and insurance) are true. Insurance costs are ridiculously high (in some cases twice as much as a normal car).

  • tehsnrub on 27/01/2025 - 18:07

    Do an associate lease instead

  • spiderbite88 on 27/01/2025 - 22:38

    Yeah associate leases will avoid you some fees and no balloon payment. Obviously they're not advertised much, as leasing companies make less money
    https://www.reddit.com/r/AusFinance/comments/1fs00hg/has_any…

Login or Join to leave a comment
Login Join