What are the best novated lease options for electric vehicles in Australia?
The best EV novated lease isn’t necessarily the cheapest quote or the flashiest car. It’s the one that suits your driving, salary, charging options and budget – with everything transparent upfront so you have no nasty surprises down the road. I’ve worked in novated leasing for longer than I’m prepared to admit, and today, around nine out of every ten vehicle enquiries we receive at Streetfleet are for EVs. That’s quite a shift from standard petrol cars, but it makes sense. In this article, I explain why.
How do EV novated leases work in Australia?
An EV novated lease lets you finance and run an electric car through your employer, with eligible lease payments and running costs taken from your pre-tax salary.
Your employer makes the payments from your salary for as long as the novation agreement is in place.
One reason they can be so economical is that a fully maintained EV novated lease can include:
- lease repayments
- registration
- comprehensive insurance
- servicing and maintenance
- tyres
- eligible charging expenses
- roadside assistance
- admin fees
While the lender technically owns your car, you still get to choose it and use it as your own. And your novated lease provider brings the finance and eligible running costs together into a regular payment that can be taken from your pre-tax salary – potentially reducing the amount of tax you pay.
Step-by-step process of salary packaging an electric vehicle
The process usually looks something like this:
- Check your employer offers novated leasing
- Choose an EV that’s right for you, your driving range and budget
- Ask for a detailed quote based on your salary, rough annual kilometres and ideal lease term
- Compare the vehicle price, lease payment, fees, running-cost budget and residual value
- Complete the finance application and get your employer’s approval
- Sign the lease and novation documents
- Your provider arranges the vehicle and works with payroll to begin deductions
It sounds like a lot on paper but here at Streetfleet, we do most of the heavy lifting and guide you through the process. We deal with the paperwork, and you get to do the fun part - choose (and drive) your car!
Understanding pre-tax and post-tax payroll deductions
When it comes to a standard petrol or diesel car, part of the lease payment is usually taken from your after-tax income to offset any FBT liability. But with an eligible EV it’s different because they’re exempt from FBT thanks to a government incentive called the EV Discount. And because there’s no FBT, the lease payments can come 100% from pre-tax salary, reducing your taxable income. This is the main reason an EV novated lease can compare so favourably with buying the same car privately.
What are the eligibility criteria for an electric vehicle novated lease?
To be eligible, you generally need to:
- be a permanent full-time or part-time employee
- work for an employer that accepts novated leasing
- meet the lender’s requirements
- select an EV that satisfies the ATO’s eligibility rules
Some lenders and employers will also accept casual or fixed-term employees, but their requirements may be stricter here because the financial risk tends to be higher.
What’s the ATO eligibility criteria for electric cars?
Under the current rules, the full FBT exemption generally applies when:
- the vehicle is a battery electric
- it was first held and used on or after 1 July 2022
- it’s provided for use by a current employee or their associate
- Luxury Car Tax has never been payable on the vehicle
The government has also announced changes beginning in April 2027. Existing arrangements will be protected, but FBT exemption for new leases will depend on the price of the car and commencement date. That makes it worth checking the latest position before signing a new agreement: Australian Government Budget 2026–27
What are the tax and FBT benefits of novated leasing an EV?
FBT exemption
The great thing about getting an eligible EV with a novated lease is that the lease can be paid from pre-tax salary without the usual FBT cost. This could reduce your income tax and also deliver GST savings on not only the purchase price but running costs too. So, if an EV genuinely suits your lifestyle, the numbers can be difficult to ignore.
Under the current rules, battery electric vehicles below the Luxury Car Tax threshold may qualify for the full FBT exemption. And cars above the threshold can still be novated, but they won’t receive the full exemption. This will change slightly in April 2027, when electric cars priced over $75,000 will attract a partial FBT rate of 75%.
The exemption can cover the car and running costs such as registration, insurance, maintenance and charging. But how much you’ll save depends on your salary, the car you choose, the length of your lease term and how much you drive, so there’s no one-size-fits-all figure.
The current threshold is also not a general limit on novated leasing. You can novate a more expensive EV; it simply may not qualify for the full FBT exemption.
GST savings
Your employer may be able to claim back the GST on your lease payments and eligible running costs, with those savings then passed onto you through your package.
This means you could avoid paying some or all of the GST you’d normally pay as a private buyer, depending on ATO limits and your employer’s salary packaging policy.
Just make sure you look beyond the headline tax saving. Compare the fees, insurance, running-cost budget and residual value to understand what the lease will really save you.
Stamp duty discounts in some states
The other thing worth mentioning is that you may also qualify for a discount on stamp duty and/or registration in some states which makes an eligible EV even more affordable with a novated lease.
Any stamp duty you do need to pay is part of the EV’s drive-away price and bundled into your novated lease package. Just keep in mind that concessions are based on where the vehicle’s registered, and eligibility conditions are likely to apply.
Which electric car models are most popular for novated leases?
The thing about EVs is that they all tend to share a few qualities: they’re quiet, smooth and very quick off the mark. And with fewer moving parts, you generally spend less time visiting a garage (which nobody’s ever complained about).
Having said that, I find that Tesla and BYD models are amongst the most popular with our customers. Tesla especially gets plenty of repeat customers returning for a second or sometimes third one. The Model 3 and Model Y are pretty popular novated lease choices.
BYD has put pressure on the entire market by offering highly specified cars across several price points. Models such as the Dolphin, Atto 3, Seal and Sealion range offer drivers’ options from smaller city cars through to family and performance vehicles.
The MG4 might be worth considering at the more affordable end, while Kia and Hyundai offer pretty polished alternatives across compact, family and premium
Popular novated lease options for a novated lease
| Vehicle | Best For | Price (Excluding government charges)* | Range / Economy | Key Benefits | Not Ideal For |
|---|---|---|---|---|---|
| Tesla Model Y - Premium RWD | Families and road trips | $58,900 | 466km WLTP | Very large boot, excellent efficiency, strong safety rating and up to 1,588kg braked towing capacity | Buyers wanting a smaller city vehicle |
| BYD Sealion 7 - Premium RWD | Families wanting an EV SUV | $54,990 | 482km WLTP | Strong value, spacious interior, modern technology | Buyers preferring established premium brands |
| Geely EX5 - Complete | Daily commuting and novated leasing | $41,990 | 475km WLTP | Competitive pricing, practical SUV packaging and good EV range | Buyers concerned about long-term resale history |
| Zeekr 7X - RWD | Executives and premium EV buyers | $57,900 | 480km WLTP | Premium cabin, advanced technology and long-range capability | Buyers wanting an extensive & reliable dealer network |
| Jaecoo J5 EV - Summit | Urban families and commuters | $36,990 | 402km WLTP | Modern styling, strong value proposition and generous standard equipment | Buyers needing significant towing capacity |
| BYD Atto 2 - Dynamic | City drivers and first EV buyers | $31,990 | 345km WLTP | Affordable entry price, compact size and low running costs | Buyers requiring maximum cargo space |
| Tesla Model 3 - Premium RWD | Commuters and business users | $54,900 | 520km WLTP | Excellent efficiency, strong performance and access to Tesla charging network | Buyers needing SUV practicality |
| Kia EV5 - Air Standard Range | Families and fleet users | $56,770 | 400km WLTP | Spacious interior, 7-year warranty and strong safety credentials | Buyers looking for a smaller vehicle footprint |
| Kia EV3 - Air Standard Range | Singles, couples and urban drivers | $47,600 | 436km WLTP | Outstanding efficiency, compact dimensions and modern technology | Large families needing maximum luggage space |
| BYD Atto 3 - Evo Dynamic | Everyday family motoring | $41,990 | 420km WLTP | Proven EV platform, excellent value and practical interior space | Buyers seeking premium performance |
| * Excluding: GST, LCT, Stamp Duty, CTP, Rego | |||||
Popular novated lease options for a novated lease
- Vehicle
- Tesla Model Y - Premium RWD
- Best For
- Families and road trips
- Price (Excluding government charges)*
- $58,900
- Range / Economy
- 466km WLTP
- Key Benefits
- Very large boot, excellent efficiency, strong safety rating and up to 1,588kg braked towing capacity
- Not Ideal For
- Buyers wanting a smaller city vehicle
- Vehicle
- BYD Sealion 7 - Premium RWD
- Best For
- Families wanting an EV SUV
- Price (Excluding government charges)*
- $54,990
- Range / Economy
- 482km WLTP
- Key Benefits
- Strong value, spacious interior, modern technology
- Not Ideal For
- Buyers preferring established premium brands
- Vehicle
- Geely EX5 - Complete
- Best For
- Daily commuting and novated leasing
- Price (Excluding government charges)*
- $41,990
- Range / Economy
- 475km WLTP
- Key Benefits
- Competitive pricing, practical SUV packaging and good EV range
- Not Ideal For
- Buyers concerned about long-term resale history
- Vehicle
- Zeekr 7X - RWD
- Best For
- Executives and premium EV buyers
- Price (Excluding government charges)*
- $57,900
- Range / Economy
- 480km WLTP
- Key Benefits
- Premium cabin, advanced technology and long-range capability
- Not Ideal For
- Buyers wanting an extensive & reliable dealer network
- Vehicle
- Jaecoo J5 EV - Summit
- Best For
- Urban families and commuters
- Price (Excluding government charges)*
- $36,990
- Range / Economy
- 402km WLTP
- Key Benefits
- Modern styling, strong value proposition and generous standard equipment
- Not Ideal For
- Buyers needing significant towing capacity
- Vehicle
- BYD Atto 2 - Dynamic
- Best For
- City drivers and first EV buyers
- Price (Excluding government charges)*
- $31,990
- Range / Economy
- 345km WLTP
- Key Benefits
- Affordable entry price, compact size and low running costs
- Not Ideal For
- Buyers requiring maximum cargo space
- Vehicle
- Tesla Model 3 - Premium RWD
- Best For
- Commuters and business users
- Price (Excluding government charges)*
- $54,900
- Range / Economy
- 520km WLTP
- Key Benefits
- Excellent efficiency, strong performance and access to Tesla charging network
- Not Ideal For
- Buyers needing SUV practicality
- Vehicle
- Kia EV5 - Air Standard Range
- Best For
- Families and fleet users
- Price (Excluding government charges)*
- $56,770
- Range / Economy
- 400km WLTP
- Key Benefits
- Spacious interior, 7-year warranty and strong safety credentials
- Not Ideal For
- Buyers looking for a smaller vehicle footprint
- Vehicle
- Kia EV3 - Air Standard Range
- Best For
- Singles, couples and urban drivers
- Price (Excluding government charges)*
- $47,600
- Range / Economy
- 436km WLTP
- Key Benefits
- Outstanding efficiency, compact dimensions and modern technology
- Not Ideal For
- Large families needing maximum luggage space
- Vehicle
- BYD Atto 3 - Evo Dynamic
- Best For
- Everyday family motoring
- Price (Excluding government charges)*
- $41,990
- Range / Economy
- 420km WLTP
- Key Benefits
- Proven EV platform, excellent value and practical interior space
- Not Ideal For
- Buyers seeking premium performance
* Excluding: GST, LCT, Stamp Duty, CTP, Rego
The information in this table is general in nature and doesn’t take into account your individual circumstances. Before making any vehicle purchase or finance decisions, please seek advice from a qualified financial adviser and a licensed motor vehicle dealer.
What to consider beyond the badge
Before choosing a vehicle, I’d look at:
- real-world range, not just the advertised figure
- access to home and public charging
- boot and passenger space
- warranty and battery coverage
- servicing and repair support
- current vehicle availability
- expected resale value
- whether the car qualifies for the FBT exemption
When it comes to EVs, range anxiety is still a big concern I hear from customers. My advice is to look honestly at how you use your car. You may not need enormous range for school runs and commuting, but longer regional travel can take a little more planning, as you may need to check where you can charge along the way to have enough battery to reach your destination comfortably.
How can I compare the best EV novated lease providers in Australia?
When comparing providers, you want to calculate the total package not just the advertised saving. This includes the vehicle price, lease payment budgets, residual, flexibility and service available throughout the entire lease.
Ask each provider for an itemised quote that shows:
- admin and management fees
- each running-cost allowance
- insurance and optional products
- estimated tax and GST benefits
- residual value
- total effect on take-home pay
Expertise is important too. At Streetfleet, we have historical experience across a broad range of cars, but clients also value being able to speak with their own consultant. Larger providers may match our technology, but they can’t replicate the relationships we’ve built.
My clients know they can call me months (even years) later if something isn’t working or they have a question. There’s no “set and forget” service. People ring and ask, “Rob, are you still there?” My answer is generally, “Why wouldn’t I be? I haven’t died yet!”
Jokes aside, we believe in a fair deal for a fair price. We’re ethical, easily contactable, and we build relationships that last beyond the day you collect the car.
What’s the process for ending an EV novated lease early?
Firstly, I always recommend getting in touch with us before making any decisions. We can talk you through your options, which may include transferring the lease to a new employer, continuing the payments personally, refinancing or paying it out early.
Changing employers doesn’t necessarily mean ending your lease. If your new employer offers novated leasing, the arrangement can usually be transferred across. If not, we can talk with your new employer and take them through the process to set things up. This is something we do often.
If you decide to end the finance contract, we can arrange a payout figure that includes the remaining balance, applicable fees and any adjustments. From there, you have the flexibility to keep, sell or trade your vehicle. We’ll talk you through the figures first, so you understand how your car’s value compares with the payout amount.
If you decide to end your lease early, it’s a matter between you and your financier, but we can help you understand your payout amount.
If you wait until your scheduled end of lease, you can generally:
- pay the residual and keep the car
- refinance the residual
- extend the lease (subject to eligibility criteria)
- trade or sell the car and use the proceeds to pay the residual
- upgrade or replace it with another vehicle
The ATO sets minimum residual percentages according to the length of your lease. One misunderstanding I clear up regularly is that you don’t simply hand back a novated lease vehicle at the end. You’re responsible for paying the residual.
We contact clients as they approach the end of their lease to discuss whether they’d like to extend, replace or keep the vehicle. We can also support you with disposal options, including through dealer and trade channels. In our eyes, you shouldn’t be left to work it all out alone.
Frequently Asked Questions
Who is Streetfleet?
Streetfleet has run the fleets and novated leases of Australian businesses since 1998. Have access to smart tools with real people behind them. Your own Streetfleet consultant is just a phone call away. Same person every time. Whether it’s a question about your budget or working out what to do at the end of your lease, you don’t start from scratch with someone new.
Author
Robert Andrews, Senior Fleet Management Consultant
Robert Andrews has worked in sales since 1987 and has been part of the novated leasing industry since its early days in 1999. With more than 11 years at Streetfleet, he shares practical insights drawn from decades of experience. Outside work, he enjoys music, travel, spending time with his grandkids, and his dog.
