Should you lease an EV?
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Welcome to Fear and Greed. I'm Sean Aylmer. Today, something a little different on the Fear and Greed feed. We're sharing an episode from our sister podcast, How Do They Afford That? hosted by Michael Thompson and Kenna Campbell, which comes out every Wednesday. There's been a huge surge in interest around electric vehicles and novated leases driven by both tax benefits and the soaring cost of petrol. But do the numbers actually stack up? And who really benefits? Michael and Kenna break down how novated leases work, the tax advantages, the hidden catches, and whether going electric could actually save you money.
Welcome to How Do They Afford That, the podcast that peeks into the financial lives of everyday Australians. I'm Michael Thompson. I'm an author and the co-host for the business news podcast, Fear and Greed. As always, I'm with Canna Campbell, financial planner and founder of Sugar Mama TV, the financial literacy platform covering YouTube, podcasts, Instagram, threads, TikTok, and books like our upcoming book, 12 Months to Financial Freedom.
What is driving the surge in electric vehicle ownership?
Not long to go now, coming out in September. Are you excited about it, Canna?
I am. And if you haven't ordered a copy yet, you get onto it straight away because this is going to really transform your financial future.
I like that.
I'm really proud of what we've done, and it's so easy to follow along. Everything's broken down into bite-sized baby steps, and it's just clean and clear. You'll know exactly what to do, but you understand why you're doing it and the benefit.
And no matter where you're at as well in your life, career, money, there is something in there for you.
And you take it at your own pace. Yes.
Yes. Anyway, there is a link to pre-order in the show notes, but you can also just find 12 Months to Financial Freedom wherever you order books online. Go into your bookshop and tell them to order it in for you. Coming out in September. Anyway, today's episode, Canna, is very much, I would say, driven... by the... That's a pun, but you won't understand the pun until you hear what the topic is.
Unless you've read the title of the podcast.
Oh, that too. Yeah, good point. Good point. It is driven by the cost of living, right? And the cost of filling up a car with petrol or diesel, which really, really hurt earlier this year when almost overnight... And what was kind of maybe $100? I'm thinking about my car, diesel, right?
Diesel too.
Yeah. And it was $110 to fill it. The tank suddenly went up to $200 plus. Yeah. And it hurt. It really, really hurt. And perhaps unsurprisingly, electric vehicles have seen a big spike this year. And with them, there's also a lot of talk about the use of novated leases in order to get your hands on an EV. My confession is that I've never really understood car leases. It's always been a little bit kind of confusing and I get the concept. I've tried to look into them, thinking that it might be a better way for me to do it, that I can use it to get a new car. I've never actually done it in the end because I can't quite figure out if it's good for my budget, if I'm going to drive enough to make it worthwhile, all of these bits and pieces.
So today, that's what we're going to work our way through to figure out whether a novated lease is a good idea To get you behind the wheel of an EV?
And of a fuel-efficient EV, yeah.
Yeah, indeed. Okay. To help save money. Correct. Let's start at the very beginning. What is a lease?
So a no-fated lease is a three-way agreement between yourself, your employer, and the leasing company. And it's a car financing agreement. And your employer makes payments on your behalf, which is deducted from your salary. A little bit like salary sacrificing. It's taken with pre-tax dollars. But it's used to pay for the car.
Okay, that is important that it comes out of your pre-tax earnings.
Pre-tax. So you're taking less in your net pay in order to package the car in.
Okay. And so how does that actually work? Then you make the deal first or you go to it. There are companies that run novated leasing?
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