A novated lease is a salary sacrifice arrangement where your car lease repayments are taken from your pre-tax salary, reducing your taxable income.
The Kia EV5 is a mid-size electric SUV available for novated lease, offering even more tax benefits as an electric vehicle.
Depending on any vehicle upgrades and the specific terms of your novated lease, it can often be much more cost-effective than taking out a car loan.
What is a novated lease?
A novated lease is a three-way agreement between an employee, the employer, and a leasing company.
The employer agrees to make monthly repayments, which it takes out of the employee's salary. Crucially, it takes those repayments from the employee's pre-tax salary. This reduces the employee's taxable income.
It can lead to substantial tax savings and often includes vehicle expenses like maintenance and insurance.
Why choose a novated lease for the Kia EV5?
The Kia EV5 is an electric mid-size SUV which is available for novated lease. You might choose this for a number of reasons:
Novated leasing can make buying a new car more achievable.
You can save on repayments because you're using pre-tax income.
When you buy an electric vehicle like a Kia EV5 you won't have to pay Fringe Benefits Tax (FBT).
Depending on any upgrades you include, the cost of the Kia EV5 is generally under the Luxury Car Tax (LCT) threshold.
Kia EV5 novated lease cost vs buying outright
When you take out a novated lease, the repayments come out of your pre-tax salary. This reduces your taxable income and means it will often cost you less to buy a car that way.
Let's take a look:
Fully maintained novated lease
You're on an annual salary of $100,000, which is a monthly pre-tax income of $8,333.33.
You choose a Kia EV5 AIR 2WD priced at $61,170 on a 5 year fully maintained novated lease. You estimate you'll be driving 10,000kms a year.
Your monthly lease repayments are $946.83 a month, which comes out of your pre-tax salary and includes costs like insurance, registration and 1 set of tyres.
Your taxable income is reduced to $7,386.50, which means your take-home pay falls to $5,787.33 a month from $6,431.33.
This means your $946.83 lease repayment only reduces your net income by $644.
At the end of the lease you can pay a residual value of $19,302 to own the car.
Factoring in all costs and tax savings, the total effective cost to you is $56,836.
Buying a Kia EV5 through a car loan
You borrow $61,170 through a 5 year car loan with a personalised interest rate of 9%.
Your monthly repayments, assuming no loan fees, will be $1,270.
This comes out of your post-tax salary, meaning you only have $5,161.33 left.
In total, your car loan will cost you $76,188.
You still need to pay separately for insurance, registration and any repairs or maintenance which would cost thousands more each year.
Verdict: A novated lease saves this person at least $16,352.
Who benefits most from a Kia EV5 novated lease?
Someone seeking the savings and benefits of an electric vehicle.
A full-time employee with a permanent and stable job.
Mid-to-high income earners who can afford the consistency of the repayments as well as the lower take-home salary.
Novated lease repayments are taken from the employee's pre-tax salary. This means the repayments are effectively managed by the employer and the employee doesn't need to do anything.
As well as the logistical benefit, this means the employee's taxable income is reduced. The biggest benefit of this is that the employee loses less of their take-home income than if they were to make the payments post-tax.
You lower your taxable income. If you take out a fully maintained novated lease, you'll save even more.
It's a cost-effective and manageable way of buying an electric vehicle.
You still have the option of buying the car at the end of the lease, but you can also choose a new lease with a different vehicle.
Cons:
You don't own the car until you've paid the residual value at the end of the lease, so there are restrictions on being able to modify the vehicle.
If you want to own the vehicle at the end of the lease you'll need to pay a one-off residual cost which can be a large financial burden.
You might have less control over where you buy fuel, get your insurance or get your car serviced.
Alternatives to a Kia EV5 novated lease
Standard car loan:
You can buy the car by taking out a car loan and making principal and interest repayments.
Dealer finance:
Car dealerships will often have finance options. They might offer lower monthly repayments but you'll still need to pay a residual payment at the end of the term.
Buying outright:
If you have the funds saved up you can simply buy the car in cash! It's a large chunk of money to lose in one go though, so make sure you won't end up with no emergency savings or financial buffer.
Subscription services:
If you're not worried about ever owning the car, you could opt for a car subscription instead. You can borrow a car for a minimum of 30 days and your fees will cover the cost of roadside assistance, comprehensive insurance, and service and maintenance.
Frequently asked questions about Kia EV5 novated leasing
Yes, you can get a Kia EV5 with a novated lease. There are several versions of this model available and they qualify for FBT exemptions.
The savings you'll make on a novated lease will depend on several factors:
The specific model you choose as well as any upgrades.
Your salary.
Whether you choose a non-maintained or a fully maintained lease.
How many kms you expect to drive each year (if fully maintained).
Once your novated lease period has ended you can decide whether you want to extend your current lease, start a new lease with a new vehicle or pay the residual cost to buy your vehicle.
Yes, you have the option of choosing a fully maintained novated lease. This includes all of your running costs and maintenance. It means saving even more money because these costs come out of your pre-tax salary instead of paying for these costs out of your already-taxed income.
Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. 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
284
Finder guides across topics including:
Find a better deal, save on your bills and get a free gift card. Sign up to be the first to hear about new Finder Rewards.
Important information about this website
Finder is a comparison service. We do not compare every product or every provider in the market.
We make money through commercial arrangements with some of the providers on this site. Products marked 'Sponsored', 'Promoted', 'Featured' or 'Advertisement' appear as a result of a commercial arrangement.
Our editorial content, product reviews and any 'Top Pick' designations are prepared independently of these commercial arrangements.
The default order of products in our tables can be influenced by commercial arrangements. You can re-sort or filter using the controls above each table.
Some content on this site may be generated or supported by AI tools. You should verify details directly with the provider.
Finder is one of Australia's leading comparison websites. We are committed to our readers and stand by our editorial principles.
Our comparison service does not include every product or every provider in the market. Some product issuers offer their products under multiple brands or through associated companies. Where we can, we identify the underlying issuer so you can compare like with like, but you should always check with the provider directly to confirm which brand you are dealing with.
Finder is a comparison website and an intermediary. We are not a product issuer and we do not provide personal financial or credit advice. When you click a link to a product, or apply for a product through our site, you deal directly with the product issuer. We may receive a referral fee, commission or other payment from the issuer if you click through, apply or take out a product. We describe these arrangements in more detail under 'How we make money' below.
Product features, fees, terms and eligibility criteria are set by the product issuer and may change. We rely on information supplied by issuers when we present product details on our site. Before you apply for or take out any product, you should confirm the details directly with the issuer.
We earn revenue from Finder in four principal ways:
Referral fees and commissions. When you click a product link, complete an enquiry form or apply for a product through our site, we may receive a referral fee, commission or other payment from the product issuer. We may also receive payment based on the volume of leads or conversions we send to an issuer.
Sponsored placements. Products marked 'Sponsored', 'Promoted', 'Featured' or 'Advertisement' appear as a result of a commercial arrangement between Finder and the issuer. These labels always indicate a paid placement. We do not use them for editorial choices.
Display advertising. Banner advertising, newsletter advertising and similar display ads on our site are paid by advertisers.
Content sponsorship. Some articles, videos and social media posts are sponsored by an issuer and are clearly labelled as such.
Our editorial opinions, product reviews and any 'Top Pick' designations are prepared independently of these commercial arrangements. A 'Top Pick' is an editorial choice made by our writers and editors based on the criteria described on each comparison page. A 'Top Pick' is not a personal recommendation and does not mean the product is appropriate for your circumstances.
If you would like to know whether we have a commercial arrangement with a specific product issuer, please contact us.
When products are grouped in a table or list, the default order can be influenced by commercial arrangements we have with product issuers. In some categories, sponsored or featured products appear in the top positions of the table by default, and are always labelled as such.
Other factors that influence default order include price, fees and features, and (where relevant) our editorial view of the product.
You can re-sort every comparison table using the controls above the table. You can filter by product features that matter to you. The order you see after re-sorting or filtering is not influenced by commercial arrangements.
Some content on this site is generated or supported by artificial intelligence tools, including our AI-powered assistant FinderBot. AI-generated content may contain errors. Please verify important information directly with the product issuer before making a financial decision. For more information about FinderBot, see the FinderBot Terms of Use and FinderBot Privacy Collection Notice.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
