Novated Leasing a Tesla in 2026: The Real Pros and Cons

If you're shopping for a Tesla in Australia right now, someone has probably told you to "just get a novated lease."

It's popular advice — and often good advice — but it's not automatically the right move for everyone. 

Here's an honest look at how novated leasing works, where the savings really come from, and the downsides you should weigh up before signing.

What is a novated lease?

A novated lease is a three-way agreement between you, your employer and a finance company.

Your employer deducts the lease payments (and usually the car's running costs — charging, insurance, rego, servicing, tyres) from your salary before tax and pays them on your behalf. Because those costs come out of pre-tax income, your taxable salary drops, and so does your tax bill.

Why Teslas and novated leases are such a strong match

Normally, salary packaging a car triggers fringe benefits tax (FBT), which claws back much of the advantage. But under rules that currently run until 31 March 2027, eligible battery electric vehicles are exempt from FBT if their price is under the luxury car tax threshold ($91,661 for FY 2026–27).

Every current Model 3 and Model Y variant sits comfortably under that line — which means the entire lease payment can come out of pre-tax salary with no FBT payable.

Worth knowing: from 1 April 2027 the rules tighten — the full exemption is slated to apply only to EVs under $75,000, with a partial discount above that.

But leases entered before the change are grandfathered, keeping their exemption for the life of the lease. If you've been on the fence, that's a genuine reason to run the numbers sooner rather than later.

The benefits

• Real tax savings. On a $65,000 Model Y with a five-year lease, someone earning $100,000 can save several thousand dollars in tax every year. The higher your marginal tax rate, the bigger the saving.
• GST savings. The finance company claims the GST on the car's purchase price, so you effectively finance the GST-exclusive price.
• One bundled payment. Charging, insurance, rego, servicing and tyres can all be packaged in — one predictable deduction instead of a dozen bills.
• No deposit. Your savings stay in your pocket (or your offset account).
• Accessories can be bundled too. Floor mats, roof racks, sunshades, chargers — rolled into the lease, they're also paid pre-tax.

The negatives — what the brochures skip

• The balloon payment. At the end of the lease you owe a residual lump sum set by ATO minimums — around 28% of the financed amount on a five-year term. You'll need to pay it out, refinance it, or sell the car to cover it.
• Interest rates are typically higher than a good secured car loan, and fees vary widely between providers. Always compare the rate, not just the tax saving.
• It's tied to your job. Change employers and you'll need your new employer to take over the lease — or the obligations revert to you, with payments from post-tax income.
• Management fees. Lease companies charge ongoing admin fees that eat into the savings if they're not competitive.
• Depreciation risk is yours. If the car is worth less than the balloon at lease end, that gap is your problem — something EV buyers should weigh given how quickly EV pricing has moved.
• Lower incomes save less. If your marginal tax rate is low, the sums may not stack up against simply buying well.

Run your own numbers — free calculator

The honest answer to "is it worth it?" is always: it depends on your salary, the car price, the rate and the term. That's exactly why we built a free Novated Lease Calculator. Punch in the vehicle cost, lease term, interest rate and your salary, and it estimates your monthly payment, balloon, and yearly tax saving in real time. You can even add accessories from our store and watch how they change the lease — no email address required, no spam, just numbers.

Try the Novated Lease Calculator

The bottom line

For most employees on a middle-to-high income buying an FBT-exempt EV, a novated lease is one of the cheapest ways to get into a Tesla — often beating a cash purchase once tax and GST savings are counted.

But the balloon, the rate, the fees and your job stability all matter. Run the calculator, then get a real quote and compare it against a standard car loan before you commit.

This article is general information only and not financial, tax or legal advice. Rules referenced are current at the time of writing and may change. Consider your own circumstances and seek independent professional advice. My Tesla Accessories may receive a referral fee if you obtain finance through a provider introduced via our site.