Save $6,191 in GST on the upfront vehicle purchase price
Pay $0 GST on packaged running costs
Eligible Volvo C40 novated leases are exempt from FBT
Shopping around for the right novated lease can save you thousands of dollars in interest and fees.
In our Volvo C40 novated lease guide:
Volvo’s C40 Recharge is an all-electric compact SUV, with manufacturer’s recommended price starting from around $79,000, plus on-road costs for the ‘Plus’ variant.
It’s in the higher end of the electric SUV market in Australia, but importantly it’s priced below the luxury car tax threshold. That makes it eligible for the fringe benefits tax exemption on an electric car novated lease.
Alongside Volvo's first ever electric vehicle model, the CX40, the C40 forms part of a growing range of EVs offered by the Swedish manufacturer. It says it plans to become a fully-electric car company by 2030.
But just how much can Aussie drivers save on a Volvo C40 with a novated lease?
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Volvo C40 Recharge Plus
Acquiring a Volvo C40 through a novated lease means you’ll be able to pay for the car plus more or less all of your running costs through your pre-tax salary. This means big income tax savings.
Through this arrangement (sometimes called car salary sacrificing) you lease the Volvo C40, with the payments deducted by your employer and paid directly to the leasing company each salary cycle.
At the end of the lease you can own your Volvo C40 outright by making the final residual payment.
The car running expenses you can include in your Volvo C40 novated lease include:
Bear in mind some related costs can’t be included. For example, the cost of installing a home battery or fast charger for your Volvo C40 cannot be packaged with your lease.
Based on current estimated pricing from the manufacturer, the Volvo C40 Recharge Plus is eligible for the FBT exemption on an electric car novated lease. This means considerable further savings.
However, drivers considering the C40 Recharge Ultimate variant are currently not eligible for the exemption. On the road costs take its drive away price above the luxury car tax threshold in Australia.
Pricing for vehicles are subject to change and delivery costs will vary depending on your location. Check with your novated lease provider about your eligibility for the novated lease FBT exemption based on the exact Volvo C40 variant you have your eye on.
Particularly if the Volvo C40 variant you’re considering is eligible for a fringe benefits tax exemption, there are significant tax savings available on a novated lease versus a car loan, or even buying the car with cash.
But the saving do vary from person to person and whether it’s worth getting a novated lease on a Volvo C40 will come down to your own situation. You’ll need to consider the overall pros and cons of a novated lease, plus factors like your salary and how many kilometres you drive annually.
The residual payment on your Volvo C40 novated lease will depend on the purchase price of the vehicle and the length of your lease. As an example, the residual payment on a C40 Recharge Plus with a 5-year novated lease (purchase price: $86,316) would be $24,887.60 (inclusive of GST) or 28.13% of the purchase price. This is based on the minimum residual value rates set by the ATO.
Remember you’ll need to use after-tax money to make the residual payment on your Volvo C40 novated lease.
Alternatively, at the end of your novated lease, you will have the option of renewing the lease on the same vehicle. If you do that, you won’t need to make the residual value. Instead, you’ll be refinancing it into the new lease.
Novated lease guides and resources
Find out more about the possible savings, benefits and things to watch out for, plus your range of options with a novated lease in Australia.