Best Cars for a Novated Lease in Australia 2026

With fuel prices high and interest in novated leasing surging, a salary-packaged electric car is one of the smartest money moves available to a lot of Australians right now. The reason is one rule: an EV priced under the luxury car tax fuel-efficient threshold ($91,387 in FY2025-26) is exempt from Fringe Benefits Tax, which means the whole cost of running it comes out of your pre-tax salary. This guide picks the best cars to put on a novated lease in 2026, ranked by value, not by who pays a commission, because we take none.

The one thing that changed: PHEVs are out

If you researched novated leases a year ago, update your thinking. Plug-in hybrids lost their FBT exemption on 1 April 2025 (existing leases can ride it out). From that date, only fully battery-electric vehicles under the LCT threshold get the exemption. So while a plug-in hybrid can still be a great cash or loan buy, for a novated lease the smart pick is now an EV. See our full novated lease guide and FBT-exempt cars explainer for the mechanics.

Best value overall: BYD Dolphin / Tesla Model 3

Because the FBT exemption applies to the whole running cost, a cheaper EV means a smaller pre-tax deduction and the strongest percentage saving. The BYD Dolphin is the value sweet spot, a genuinely good small EV at a low lease cost. Step up and the Tesla Model 3 remains the default for a reason: strong range, the Supercharger network and excellent resale, all of which matter at lease-end.

Best family EV for a lease: BYD Sealion 7 / Kia EV5

For a mid-size family SUV, the BYD Sealion 7 packs a big battery and long range for a low lease cost, while the Kia EV5 brings a strong warranty and a polished package. Both sit comfortably under the LCT threshold, so the full FBT exemption applies. The Tesla Model Y is the resale-safe option if your budget stretches.

Best cheap electric SUV to lease: Geely EX5 / Leapmotor B10

Want the lowest possible lease payment on an SUV? The Geely EX5 and Leapmotor B10 are among the cheapest electric SUVs on sale, which translates to small pre-tax deductions and a big proportional saving. See the full ranking in our best EVs under $50k guide.

Best premium EV under the cap: Zeekr 7X / Hyundai Ioniq 5

You do not have to go cheap to get the exemption. The Zeekr 7X and Hyundai Ioniq 5 deliver a premium experience while staying under the $91,387 threshold, so the full FBT benefit still applies. Just confirm the exact variant's price stays under the cap before you sign.

How to think about the savings

Three things stack in your favour on an EV novated lease: you pay finance and running costs from pre-tax salary, the FBT exemption removes the tax that normally claws that benefit back, and you save the GST on the purchase price up to the claimable limit. The higher your marginal tax rate, the bigger the win. Independent analyses have shown EV novated leases saving higher earners well into five figures versus a car loan over a five-year term. Use our running-cost calculator to compare charging against petrol, and read our methodology for how we treat pricing.

Who it suits, and who it does not

A novated lease is not for everyone. It works best if you are a higher-income earner with a secure job and no plans to switch employers mid-lease. The downsides to weigh: it can reduce your borrowing capacity (relevant if you are buying a home), there are costs if you exit early, and the benefit shrinks at lower tax rates. It is a salary-packaging arrangement, so get advice for your situation before committing.

The bottom line

For the right person, an EV on a novated lease is one of the best-value ways to drive a new car in Australia today. The cheaper the EV, the bigger the proportional saving, so the BYD Dolphin and the value Chinese EVs are the standouts, while the Tesla Model 3 and Model Y add resale security. Whatever you choose, keep it under the $91,387 LCT threshold to keep the FBT exemption, and run the numbers for your own income. Browse every EV by price and range in our car directory.