If you have been paying attention to Australia’s car market, you have probably noticed a massive shift toward electrified vehicles. Conventional hybrid sales have surged by 75%, while plug-in hybrid electric vehicles (PHEVs) have doubled, up by a staggering 100%. But here’s what’s really interesting: a huge chunk of this shift is happening through novated leases. A PHEV Novated Lease isn’t just another way to get behind the wheel, it is becoming the smart move for drivers who want a better, more cost-effective way to own a car.

But what’s really driving this trend? Why are so many Aussies swapping their petrol cars for PHEVs, and why is a novated lease making the decision even easier? The answer isn’t just about saving money or cutting emissions, it is about a smarter, more flexible way to drive that fits the way you live. Let’s find out why a PHEV Novated Lease could be the best decision you make for your next car.  

What’s Inside:

1. How do PHEVs Differ from Traditional Hybrids and Fully Electric Vehicles?
2. Why is a PHEV Novated Lease a Smart Choice for Drivers?
3. Step into the Future with a PHEV Novated Lease

How do PHEVs Differ from Traditional Hybrids and Fully Electric Vehicles?

If you are looking at electric vehicles, you have probably come across three main options: plug-in hybrid electric vehicles (PHEVs), traditional hybrids (HEVs), and fully electric vehicles (EVs). But what is the difference, and which one suits your lifestyle best?

Traditional Hybrids (HEVs)

Hybrids are the OG of eco-friendly cars. They combine a petrol engine with a small electric motor to improve fuel efficiency. You don’t need to plug them in because the battery charges itself through regenerative braking and the engine. However, they only run on electricity for short bursts at low speeds, so you’re still mostly relying on petrol.

Plug-In Hybrids (PHEVs)

PHEVs are like hybrids but with a twist, they have larger batteries that you can charge by plugging in. This allows them to drive 30-100 km purely on electricity before switching to their petrol engine for longer trips. If you are commuting or running errands, you might never need to use petrol. But when you hit the highway, the petrol engine kicks in, giving you peace of mind about the range.

Fully Electric Vehicles (EVs)

EVs ditch the petrol engine entirely, they are powered solely by batteries and electric motors. This means zero emissions while driving and lower maintenance since there is no engine oil or exhaust system to worry about. EVs are ideal if you have access to reliable charging infrastructure and want maximum environmental benefits.

Why is a PHEV Novated Lease a Smart Choice for Drivers?

Thinking about upgrading your car but want to keep running costs low? A plug-in hybrid electric vehicle (PHEV) could be the perfect balance between fuel savings and flexibility, especially when paired with a novated lease. 

Here's why a PHEV novated lease is a smart choice for drivers:

Smart tax savings through salary packaging

As of 1 One of the biggest advantages of a PHEV novated lease is the ability to salary package your car payments and running costs using your pre-tax income. This means a portion of your salary is allocated to cover your lease before tax is deducted.

Here are some reasons why you should consider a PHEV novated lease:

Save on Goods and Services Tax (GST)

When you purchase a car outright, you typically pay 10% GST on the total cost. However, with a novated lease, there’s an up-front GST discount on your vehicle (up to $6,334 for 2024-2025 financial year), meaning you instantly save thousands of dollars upfront.

Additionally, GST on running costs is also excluded from your expenses, significantly reducing your overall car ownership costs. These savings make leasing a PHEV even more cost-effective, particularly when compared to buying a new vehicle outright.

Lower Running Costs

Since most PHEVs can be charged at home or work, many drivers find themselves using petrol only occasionally, drastically reducing their fuel expenses. Maintenance costs are lower than traditional petrol or diesel cars, as the electric motor reduces wear and tear on the engine. When combined with a novated lease, where all running costs are bundled into one pre-tax payment, managing your car expenses becomes more convenient and affordable.

Smart FBT Management

While PHEVs don’t qualify for full FBT exemptions like EVs, novated leases manage FBT through a mix of pre- and post-tax deductions. This makes it easy and cost-effective compared to traditional car ownership.

Flexible Residual Value Options

At the end of the lease, you can either pay out the residual value and own the car, release it, or sell it. If the car’s market value is higher than the residual, you pocket the difference, helping you upgrade sooner.

Step into the Future with a PHEV Novated Lease

Think of a PHEV novated lease as the ultimate upgrade, not just for your car, but for your finances. You are not just choosing a fuel-efficient, low-emission ride, you are unlocking a smarter way to pay for it. Sounds like a win? That’s because it is.

Still paying full price for fuel, rego, and maintenance? Time to rethink the game. Don’t let outdated car ownership models keep you stuck in neutral.Get in touch with Novated Choice today, and let’s put you in the driver’s seat of a smarter, more cost-effective PHEV.