Novated leasing for Teslas

If you fancy driving away with a Tesla and paying less tax, novated leasing might be the best option for you.

Key takeaways

  • With a novated lease you can use your pre-tax salary to pay to drive a Tesla. This means you pay less income tax.
  • Electric vehicles like Teslas also come with additional tax benefits. If you're an employer, you won't have to pay Fringe Benefits Tax.
  • Once your novated lease comes to an end, you can choose to start a new lease or buy the car outright.

What is novated leasing?

With a novated lease, you'll be able to sacrifice a portion of your salary to make payments towards leasing a vehicle.

Importantly, those payments come from your pre-tax salary. This means you end up paying less tax!

The novated leasing agreement is between yourself, your employer and a third party leasing company.

Your employer agrees to pay for the leasing costs directly and they then recoup the costs from your salary.

Can I use a novated lease to drive a Tesla?

Novated leasing is a great option for anyone wanting to drive an electric vehicle.

Not only does it allow you to drive away with a Tesla without committing to the upfront cost, but there are also huge tax benefits that come with leasing an EV.

When it comes to electric vehicles, many people are keen to drive a Tesla. You can typically take out a novated lease to drive both a Tesla Model 3 and Tesla Model Y.

What are the benefits of leasing a Tesla?

The benefits of leasing a Tesla are generally the same for any electric vehicle:

For the employee

  • Cost and tax benefits. If you've been nervous about the cost of a Tesla, this is a cost-effective option which also saves you money on tax! You may also benefit from corporate fleet discount programs that can reduce the retail price of a vehicle.
  • Easy loan management. With the payments coming out of your salary before you even see it, you don't have to worry about managing the costs yourself.
  • After-lease sale benefits. Depending on whether you own the car at the end of the lease agreement, if you sell your vehicle after the lease is up, any profit from the sale will be tax-free.
  • No usage restrictions. There are no limitations on the way you use the vehicle, and you can use it for business or personal use as much as you like.

For the employer

  • No fringe benefits tax. Electric vehicles and their associated costs are exempt from fringe benefits tax (FBT)! They also have a higher luxury tax threshold.
  • A way to offer incentives. A novated lease is a way to incentivise employees with little expense to your business.
  • Limited risk. You won't be responsible for the vehicle if your employee leaves before the lease is up.
  • Not attached to the business. Novated leases are not considered an asset or liability of the business.
  • You don't need to arrange a company fleet. Novated leases are a way for your employees to access discounted vehicle leasing through your company without the burden of your business managing a company fleet.

The tax benefits of novated leasing a Tesla

Reduces income tax

Regardless of whether you're leasing an electric vehicle or another vehicle, the benefit of novated leasing is that it comes from your pre-tax salary. This reduces the amount of income tax you pay. You may even find that the lease payments end up bringing you down into the next tax bracket.

Exempt from FBT

Electric vehicles like Teslas are exempt from fringe benefits tax (FBT). Normally, a benefit like novated leasing is a 'fringe benefit'. A fringe benefit is a non-monetary benefit that the employer gives the employee, but they still need to pay tax on. With electric vehicles, the employer doesn't need to pay FBT.

Higher luxury tax threshold

Electric vehicles also have a higher threshold when it comes to luxury car tax. For the financial year 24/25 there is no luxury tax to be paid on EVs worth less than $89,332.

What Teslas can I lease?

In Australia, you can choose to lease a Tesla Model 3 or a Tesla Model Y through novated leasing.

These are the different versions of these models that are available:

  • Tesla Model 3 Rear-Wheel Drive
  • Tesla Model 3 Long Range
  • Tesla Model 3 Performance
  • Tesla Model Y Rear-Wheel Drive
  • Tesla Model Y Long Range
  • Tesla Model Y Performance

What are my options for leasing a Tesla?

There are several companies that offer novated leasing for Teslas in Australia. If you are salary sacrificing through your employer, it might be that your employer already has an agreement with a novated leasing company. You should check with them first to see what arrangement they have.

You also have the option of going direct to Tesla and organising a 'self-arranged novated lease'.

When you choose your novated lease, you will also have the option of a non-maintained novated lease or a fully maintained novated lease.

Can I keep my Tesla at the end of the lease?

Once your lease has ended you have a couple of main options:

  • End that lease and start a new one.
  • Pay off the rest of the repayments to buy the car.

If you still need to use a car and will remain employed, it may be worth starting a new lease. That's because novated leasing is the most cost effective way to have a car.

See our complete guide on what to do once your novated lease has ended.

Frequently asked questions about Tesla novated leasing

Rebecca Pike's headshot
Written by

Senior Money Writer

Rebecca Pike is Finder’s senior money writer, with over 10 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise, A Current Affair, 9News, and Sky News, and contributes expert analysis to publications like Yahoo Finance and The Latch. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines. See full bio

Rebecca's expertise
Rebecca has written 207 Finder guides across topics including:
  • Home loans
  • Cost of living
  • Budgeting

Ask a question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms Of Service and Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

More guides on Finder

  • Electric vehicle novated leasing

    If you're in the market for an electric vehicle but you're not sure you can manage the costs, a novated lease through your employer might be a good option for you.

  • Bank Australia Car Loan

    Concerned about the earth but still need a car to get you around? The Bank Australia Car Loan comes with a competitive rate and trees will be planted to offset the greenhouse gas emissions produced by your car for the term of your loan.

  • Car loans for classic cars

    Want to buy a classic car but don't have the ready money? There are still financing options available for classic vehicles. Find out what loans you have to choose one and which one will work best for you.

  • Rent an Uber car in the Gold Coast

    There's a way you can drive with Uber without using your own car – find out how.

  • Rent a car for Uber in Canberra

    Find out how you could rent a car to drive with Uber in Canberra

  • How do you sell a car under finance?

    Read the guide on how to sell an encumbered vehicle to find out the extra steps involved.

  • Tesla Superchargers Map: Where you can charge in Australia

    Find out the extent of Australia's Tesla Supercharger network with our complete map of every charging station.

  • Used car loan rates Australia

    You can still get a car loan if you want to finance a used car. Find out how you can get a used car loan and see what rates are available for the used car you want. Learn how to best compare lenders and apply for your loan today.

  • New Car Loan Interest Rates

    Whether you're upgrading your current car or looking for a new vehicle for your first car purchase, a new car loan can help you finance your set of wheels. Find out everything you need to know about new car loans to help you find the right loan for you.

Go to site
Compare your car loan options in seconds