Can't get a novated lease? Here's how else to finance an EV

You've looked into a novated lease and hit a wall. Your employer doesn't offer it, you're on an ABN, your salary doesn't stack up, or the application came back no.

Here's the thing worth knowing before you give up on the idea. Some of those walls are real and some aren't. And even where a novated lease is genuinely off the table, an EV is still worth buying. The finance just works differently.

This page covers both: whether your no is actually final, and what your options are if it is.

"My employer doesn't offer novated leasing"

Usually solvable.

This is the reason we see most often, and it's the one most likely to be wrong. A novated lease costs your employer nothing. There's no cash outlay, no ongoing liability once the paperwork is done, and no tax consequence for them. What they're actually agreeing to is a payroll deduction and signing a Deed of Novation.

Most refusals aren't policy. They're someone in HR who hasn't been asked before and doesn't want to find out. That's a very different problem, and it's one you can often solve by asking properly.

If your employer has a preferred provider and told you that's your only option, that's also usually not true. The payroll admin can stay with them while the finance comes from somewhere cheaper.

"I'm a sole trader, contractor, or run my own business"

Genuinely not eligible. But you have options employees don't.

A novated lease needs three parties: you, a financier, and an employer who pays you a salary. The whole benefit comes from sacrificing pre-tax salary. No employer, no salary to sacrifice, no novated lease. Having an ABN doesn't change that.

The good news is that the tax system already gives business owners a different route to the same place. With business vehicle finance, you own the vehicle from day one and the lender holds security over it. Depending on your structure and how much you use the car for business, you may be able to claim the GST on the purchase price through your BAS, and claim interest and depreciation as business expenses.

Whether that beats what an employee gets from a novated lease depends entirely on your business use percentage and your marginal rate. Your accountant can tell you in about ten minutes.

"I'm casual, on probation, or new in the job"

Usually not yet, rather than never.

This one is a financier decision, not a novated lease rule. Lenders want confidence you can make repayments for the full term. Casual income can be assessed, but they generally want to see a consistent history behind it. Probation is a timing problem more than a permanent one.

"My salary is too low for it to be worth it"

Sometimes true, and we'd rather tell you.

The saving on a novated lease is proportional to your marginal tax rate. The lower your rate, the smaller the benefit. At the same time, the costs are fixed: the finance, the fees, the residual payment waiting at the end.

Below roughly $60,000, the tax saving often doesn't justify committing to years of payments on a new car. That's not a rule, it depends on the car and the structure, but it's the honest starting point.

If that's you, the better question isn't "how do I get a novated lease." It's "what's the cheapest way for me to get into an EV." Often that's a used EV on a straightforward car loan, at a price that doesn't stretch you. You'll have a smaller repayment, no residual to worry about, and you own it outright.

"My finance application was declined"

Usually about you as a borrower, not about novated leasing.

Novated lease finance is assessed like any other car finance. If you were declined, the same assessment will apply to a car loan, so it's worth understanding why before you apply anywhere else.

The usual causes are serviceability (your income against your existing commitments), something on your credit file, or too many recent credit applications.

"The car I want isn't eligible"

That's about the car, not about you.

The FBT exemption that makes EV novated leases so effective only applies to battery electric vehicles priced under the luxury car tax threshold for fuel efficient vehicles, which is $91,661 for the 2026-27 financial year. Plug-in hybrids lost the exemption in April 2025.

Petrol and diesel cars can still be novated, but FBT applies and the saving shrinks a lot.

So you have a choice. Pick an eligible EV and keep the tax benefit, or finance the car you actually want a different way. Neither is wrong. It just depends which matters more to you.

If a novated lease is genuinely out, here are the realistic options. We've put them roughly in order of how often they're the right answer.

Secured car loan

The default for most people. The car is security for the loan, so rates are lower than unsecured borrowing. You own it from day one, your employer isn't involved, there's no FBT and no residual unless you choose a balloon payment.

Some lenders offer discounted rates specifically for electric vehicles, so it's worth asking rather than assuming the standard rate applies.

Best for: employees who can't access novated leasing, and anyone who wants to own the car outright without an employer in the middle.

Business vehicle finance

For ABN holders. Usually structured as a chattel mortgage, where you own the vehicle from the start and the lender takes security over it.

The advantage over a consumer car loan is tax treatment. The GST on the purchase price can generally be claimed in your next BAS rather than dripped out over the term, and interest and depreciation may be deductible to the extent you use the car for business.

Best for: sole traders, contractors, and small business owners.

Personal loan

Unsecured, so the rate is higher and the term is usually shorter. But it's useful in one specific case: buying an older or cheaper used EV where the car's value is too low for a lender to secure a loan against it.

Best for: smaller amounts and older vehicles.

Dealer or manufacturer finance

Sometimes genuinely competitive, particularly when a manufacturer is running a subsidised rate to move stock. Often not.

The rate is only part of the picture. Check the term, whether there's a balloon payment at the end, and what fees are attached. A low advertised rate with a large balloon can cost more overall than a higher rate without one.

Paying cash, or using an offset or redraw

The option finance companies never lead with.

If you have money sitting in an offset account, or available redraw on your home loan, using it to buy the car may cost you less than any car loan will. You're effectively borrowing at your mortgage rate instead of a car finance rate.

The catch is real though. It ties up your buffer, and if you don't deliberately pay it back down you've spread a five year car purchase across a twenty five year mortgage, which costs far more in the long run.

Not right for everyone. But it belongs on the list, and nobody selling finance is going to put it there.

A novated lease at your next job

If you're job hunting, ask about salary packaging during the offer stage rather than after you start. It's a normal question, and the answer tells you something useful about the employer either way.