Novated leasing a new electric vehicle (EV) is a smart, flexible way to save thousands in tax – but you need to do your homework before you sign on the dotted line.  Let’s explore how NOT to get short changed on a novated lease.  For drivers looking to make the switch to zero emissions transport, novated leasing can be a great option offering employees a way to pay for their new EV and its running costs from their pre-tax income.   With a single weekly, fortnightly or monthly payment, you can cut the red tape and tailor your EV lease terms to suit your needs, plus EVs under $89,332 are exempt from Fringe Benefits Tax providing greater tax savings.  But where’s the catch?  The Good, Bad & Ugly  Despite offering a range of genuine benefits, the road to a successful novated lease can be fraught with potential pitfalls, especially when it comes to hidden fees, charges and exorbitant interest rates.   Recent Australian media coverage has highlighted unsavoury practices among some providers, leading to calls for tighter regulation across the industry.    The good news is, with the right information and choice, you can find yourself a novated leasing provider that can give you the right lease structure that will suit your lifestyle and keep even more money in your pocket.  Rideshare Research is Key  Before embarking on the hunt for a novated lease, it's crucial to arm yourself with knowledge – and that means research.  Get to know the specifics of the EV you have in mind, considering factors like current availability, car prices, future market values, maintenance costs and potential government incentives.   Understanding the market will empower you to make informed decisions, ensuring you're not blindsided by unexpected vehicle expenses down the road.  Beware the Hidden Fees!  Hidden fees and charges are the silent assassins of novated leases. To avoid falling victim to these financial pitfalls, you need to really scrutinise the fine print of your novated lease quotes and the lease agreement. Pay special attention to increased vehicle costs, larger than normal establishment fee’s, effective interest rates, unnecessary insurances, additional administrative fees, and any ambiguous or suspicious-looking clauses that might leave you vulnerable to unexpected costs.    Don’t be afraid to ask the simple questions!  Less transparent providers may attempt to bundle costs without full disclosure, so it's essential to be diligent and question anything that seems unclear.  You’ll thank yourself later.  Transparent Interest Rates  Interest rates can significantly impact the ability of a novated lease to provide tax savings. Some providers may attempt to lure you in with seemingly low level interest rates, only to load the quote/contract with a high level of hidden charges and fee’s, leading to increased monthly payments.   Instead, insist on transparency from the outset, ensuring that you fully understand the implied interest rate structure that is being applied to you and how it impacts your overall monthly payment and financial commitment. Compare rates across different providers and be wary of anything that seems too good to be true.  A transparent provider will be happy to disclose interest rates, brokerage and establishment fee’s etc.    Check the Maintenance Packages  EVs are generally more straightforward in terms of maintenance compared to their combustion engine counterparts.  However, some novated lease providers may try to bundle unnecessary maintenance packages into your agreement, driving up costs unnecessarily.   Know and assess your actual maintenance needs and negotiate a package that aligns with the specific requirements of your EV and your driving patterns.  Leverage Government Incentives  Make sure you check whether your state or territory offers any special tax breaks or rebates for EVs. Familiarise yourself with the available programs in your region and factor them into your cost calculations. This not only helps reduce your financial burden but also contributes to the overall affordability and appeal of EV ownership.  ModelY Quotes - Compare Apples with Apples   Navigating the novated lease landscape can be complex. When obtaining quotes, make sure it’s a fair comparison by evaluating the same vehicle models, lease terms and included services – especially the nitty gritty.  Consider seeking advice from a financial expert and make sure you’re consulting with professionals who specialise in novated leasing and have a good reputation.   Choosing a novated lease on a new EV can be a rewarding choice if you take a proactive approach!  By doing your research, negotiating key terms and comparing quotes accurately, you’ll enjoy a successful novated lease experience that aligns with your budget, saves you more money and contributes to a greener, more sustainable future.  Challenge the status quo with your employer  Many employers stick with long term arrangements on a preferred supplier basis with novated leasing providers or salary packagers for the sake of ease or to avoid lengthy tender processes.   Much like the provision of Superannuation funds, employers should encourage choice and allow access to cheaper novated lease arrangements where the employee benefits financially.   Novated leasing set up for your employer is simple and easy to administer. If your employer refuses your request to pick your own provider, ask for the reasons why they are not allowing you to save more money.   Try out our transparent calculator  Novated leasing doesn’t need to be a hassle. At CarBon we are all about transparency. Our quotes are open book and easy for you to understand. We show you what you are paying upfront and break everything down, so nothing is hidden. Try out our transparent calculator and request a personalised quote. Our team is here to ensure you maximise your tax savings.