Frequently asked questions

Can anyone Novate a car via EV novation

A Novation Agreement is between an Employer, Employee and financier, which means a Novation Agreement can not be set up without your employer's consent and involvement.

Your employer will be required to 1) Sign the Novation Agreement 2) Set up pay deductions 3) Send funds to EV Novation monthly to cover your finance and running costs.

If EV Novation do not have a current relationship with your employer, the first thing we need to do is ensure your employer offers Novated Leasing to its employees. Assuming they do, the next step is to ensure they meet our criteria to become an EV Novation client and ensure they don't have an exclusive agreement with another sole provider.

A Novated Lease also involves a personal finance application from the employee. The finance application must be formally approved before an employee can proceed with a new Novated Lease.

Why not buy an EV using a home loan redraw or cash

The FBT Exemption is only available to businesses, or individuals who purchase their vehicle via a Novated Lease for private use.

Novated Leasing is the only way an individual can get a 100% tax deduction for finance and running costs, on an FBT Exempt EV that is used privately.

Can I Novate an EV, or fuel efficient car, that is not eligible for the EV FBT Exemption

Yes you can. However, an EV that is not eligible for FBT Exemption will be subject the the same FBT treatment as a petrol or diesel vehicle.

This seems too good to be true. What is the catch

Only around 2% of new vehicles sales in Australia are EVs.

The Government is completely committed to increasing EV sales in Australia as per their emission policies and targets.

They recognise that the cost of most EVs is a major barrier to more people making the switch to EV. To address this, the FBT Exemption provides massive GST and income tax savings that subsidise roughly 35% - 45% of the costs associated with purchasing AND running an EV. This policy makes it so much easier for Australians to access an EV.

Who owns the car

You own the car, it is registered in your name from day 1.

Why is there a residual / balloon at lease end

ATO legislation requires a Novated Lease to have a residual / balloon still owing at lease end. Your monthly finance payment is formulated so that you only pay your loan down to the residual amount over the term.

What happens if my car is worth more than the residual, do I have to pay more

In most cases, we find that vehicles under a Novated Lease arrangement are worth more than the residual at lease end. This is to the sole benefit of the owner, as the residual is locked in day 1 and won't change. Any surplus between the sale price of the car and the residual is kept by the owner and is not subject to any type of taxes payable.

Can I claim the cost of charging my EV

Charging costs are allowed to be claimed as an ongoing running cost. However, this is not 100% straight forward.

For example, if your charger is connected to your household power meter, it is not possible to proportion the costs that relate specifically to charging your EV.

If your EV charging station is separately metered, it would be easier to quantify your EV charging costs and to keep records to satisfy ATO requirements.

EV Novation are not financial advisers and we do not provide advice or a compliance service around claiming charging costs. If you would like to include charging costs in your novated lease package, you should seek independent financial advice first, to understand the rules and ensure you are able to comply with the relevant ATO legislation and record keeping requirements.