Best Cars for a Novated Lease in Australia 2026: Picked by the Tax Lines

If your employer offers a novated lease, you have already done the hard part. You know it is available, and you have probably worked out that an electric car is where most of the tax saving sits. What is left is choosing the actual car. That choice sets your tax treatment, the residual you owe at the end and your running costs for the next three to five years.

The good news is that most of the decision comes down to three price lines, and you can check where a car sits against them before you sign. Below are our picks, grouped by those lines rather than ranked, and what to check on the residual, the running costs and keeping the exemption for the whole lease. If you are new to how a novated lease works, start with whether novated leasing is worth it. When you have a shortlist, Rodar can find the exact grade you want and sort the lease on its price.

The three lines that decide the tax

Three figures decide how a car is treated in a novated lease in 2026-27. None of them is tested against the drive-away price on your quote.

Line	What it decides	What it is tested against
$91,661	The fuel-efficient luxury car tax threshold. An electric car over it gets no FBT exemption at all.	The LCT value: the retail price including GST, dealer delivery and accessories fitted before delivery or arranged with the seller. It leaves out stamp duty, registration, CTP insurance, extended warranties, finance costs and service plans.
$75,000	Announced, subject to legislation: from 1 April 2027, the full exemption on new commitments applies only at or under this figure.	Under the draft law, the car's base value when your employer first holds it: the cost price excluding registration and stamp duty, plus dealer delivery, fitted accessories, GST and any LCT.
$69,883	The car limit. It caps the GST credit on the car at $6,353.	The car's cost. Above the limit, the credit stops growing.

Two things follow. A car with a drive-away price over $91,661 can still sit under the line, because stamp duty and registration are not counted. And a car that lists under the line can go over it once tint, a tow bar or other extras are fitted before delivery. The closer a car lists to $91,661, the less room it has for extras. The Tesla Model Y Performance lists between $75,000 and $91,661, so check its LCT value with the accessories you want before you order.

The $75,000 line works the same way. The Model Y L Premium AWD lists at $74,900 before on-road costs, $100 under the line before delivery and accessories are added. If a car on your shortlist is within a few thousand dollars of either figure, ask for its LCT value and base value in writing before you order.

For electric cars valued at $75,000 or less, 1 April 2027 is not the deadline

Most of the urgency you will see is about 1 April 2027. Under the announced plan, that date only changes the outcome for electric cars valued between $75,000 and $91,661. For those, the full exemption applies to commitments made before 1 April 2027, and a 25 per cent concession applies after it.

For a car with a base value of $75,000 or less, the draft law keeps the full exemption where the commitment is made before 1 April 2029. So if the car you want sits comfortably under $75,000, there is no need to hurry your decision for the 2027 date. All of this is announced and in draft, not law, so ask any provider in writing how your quote treats it. Our guide to a novated lease on an electric car sets out the full timeline.

Electric cars listed under $75,000

Each car in this group has grades that list under $75,000 before on-road costs, and we note where a grade crosses a line. Under the announced plan, a car under $75,000 keeps the full exemption for commitments made before 1 April 2029. For range and charging on each car, see our guide to the best electric cars.

Tesla Model Y

The Model Y is an electric medium SUV with a wide spread of grades. They list from $58,900 before on-road costs, and every grade except the Performance sits under $75,000. The L Premium AWD, at $74,900, is the one to check closely against that line. The Performance lists between $75,000 and $91,661, so it belongs in the middle group below.

Tesla is one of the brands where the saving comes through a novated lease, and our fee sits inside the lease arrangement. If you are weighing it against the Sealion 7, see our Model Y and Sealion 7 comparison.

Tesla Model 3

The Tesla Model 3 is the lower-priced way into a Tesla, as a sedan. Every grade except the Performance lists well under $75,000 before on-road costs. The Performance lists at $80,900, which puts it in the middle group. One nameplate covering both groups shows why the grade matters more than the model.

A lower price also means a smaller residual in dollars at the end of the lease. As with the Model Y, the saving comes through a novated lease, and our fee sits inside the lease arrangement.

BYD Sealion 7

The BYD Sealion 7 is an electric medium SUV with two grades: the Premium at $54,990 and the Performance at $63,990, both before on-road costs. Even the Performance lists $11,010 under the $75,000 line, which leaves room for delivery and the accessories you need.

On BYD, as on Tesla, the saving comes through a novated lease, and our fee sits inside the lease arrangement.

Kia EV5

The Kia EV5 is a family-size electric SUV, and every grade lists under $75,000. Prices run from $56,770 to $71,770 before on-road costs. The top GT-Line AWD lists $3,230 under the line, so watch what is fitted before delivery. Dealer delivery, tint and a tow bar all count towards base value under the draft law.

Kia is not a novated-only brand, so the drive-away price can be competed for in the usual way. That matters, because every lease payment is built on it. Our guide to getting a good price on a new car covers how.

Kia EV3

The Kia EV3 is a small electric SUV, listed from $47,600 to $66,490 before on-road costs. Even the top GT-Line AWD lists $8,510 under the $75,000 line. A lower price means a smaller residual in dollars, and a smaller possible gap if the car's used value falls short of it.

MG4

The MG4 is an electric hatch, and every grade lists well under $75,000. A lower price keeps the residual small in dollars, so there is less riding on the car's used value when it falls due. MG is not a novated-only brand, so the drive-away is competed for too.

BYD Dolphin

The BYD Dolphin has the lowest entry price here, listed from $29,990 to $36,990 before on-road costs. If you want the exemption on the smallest commitment, it is the place to start: a smaller lease, a smaller residual and less depending on what the car is worth at the end. The saving on BYD comes through a novated lease, and our fee sits inside the lease arrangement.

Hyundai Kona: the same car as a hybrid or an electric

The Hyundai Kona comes as a hybrid, listed from $36,950 before on-road costs, and as an electric, with every electric grade listed under $75,000. That makes it a clear way to see what the exemption does for you.

Ask for a quote on the hybrid and on the electric over the same term and kilometres, and compare the cost per pay side by side. The electric gets the exemption and the hybrid does not, but the hybrid lists for less. Which comes out ahead depends on your salary and your quotes.

Electric cars listed between $75,000 and $91,661

This is the group where 1 April 2027 matters. Under the announced plan, a car with a base value over $75,000 keeps the full exemption only where the commitment is made before 1 April 2027. After that, the plan replaces it with a 25 per cent concession. It is subject to legislation, and the draft can change before it passes.

Hyundai Ioniq 5

The Hyundai Ioniq 5 shows how the grade, not the model, decides the group. The entry RWD lists at $68,200 before on-road costs, which puts it in the first group. The Elite lists at $73,200, $1,800 under the $75,000 line before delivery and accessories. The N Line Premium lists at $83,700, in this group. The top Ioniq 5 grade lists over $91,661, so it gets no exemption at all.

Hyundai is not a novated-only brand, so the drive-away is competed for. On the Elite in particular, ask for the base value in writing before you sign.

Also in this group

The Tesla Model Y Performance sits here, and so does the Model 3 Performance, listed at $80,900 before on-road costs. So do the GT-Line grades of the Kia EV6. The EV6 GT lists over $91,661, so it gets no exemption.

If you are choosing in this group, timing is the part you can plan. Under the plug-in hybrid rules in 2025, the car had to be used or available for use before the cut-off, and the ATO had no discretion where delivery was delayed. Firms that have reviewed the 2027 draft say it tests the date of the commitment instead, but it is not law yet. Ask your provider in writing how your quote treats the announced changes, and what happens to your payments if the law passes as announced.

Stock affects timing too. When the car is in stock and the finance is already sorted, delivery can take 24 to 48 hours. In most cases it is one week onwards. It depends on the specific model and stock availability across our network of over 1,000 trusted automotive dealers and manufacturers.

A hybrid, if you cannot charge at home

Where you park makes a real difference to the running costs. Off-street parking with a power point makes an electric car simple to charge at home. In an apartment or on the street, you may rely on public chargers and pay public charging prices, which changes the budget. For some drivers, a hybrid is the more practical choice, even without the exemption.

Toyota RAV4

Toyota has dropped the petrol Toyota RAV4 in Australia, so it now comes as a hybrid or a plug-in hybrid. The hybrid grades list from $45,990 to $60,340 before on-road costs, all under the $69,883 car limit. Take care with the plug-in hybrid grades, the XSE PHEV and GR Sport PHEV: plug-in hybrids have had no FBT exemption on new leases since 1 April 2025.

A hybrid lease works differently. Part of each payment comes from after-tax pay to cancel the FBT, so the saving is smaller than on an exempt electric car. Our novated lease guide explains how the employee contribution method works, and our list of the best hybrid SUVs has more options. Toyota is not a novated-only brand, so the drive-away is competed for.

Choose the residual when you choose the car

The residual is fixed on the day you sign. What the car is worth when the residual falls due is not. If the car sells for less than the residual, you pay the difference.

You can check this tonight. Look up used listings for the same model and grade at the age your lease will end, for example three years old. Compare those prices with the residual in dollars on your quote. A lower-priced car means a smaller residual in dollars, and a smaller gap if the used price falls short.

What the car costs to run inside the lease

• Electricity is covered. Under the exemption, the cost of charging is an exempt car expense. For home charging, the ATO lets employers use a rate of 5.47 cents per kilometre for the FBT year ending 31 March 2027.
• A wall charger is not. The ATO says a home charging station is not a car expense under the exemption, and it may be a separate fringe benefit. Ask your provider how they treat one before you install it.
• Insurance is car-specific. Premiums vary by model, so get a quote for each car on your shortlist. If your provider lets you arrange your own cover, compare it with theirs.
• Kilometres set the budget. Charging, tyres and servicing are budgeted on an annual kilometre figure. Set it to what you actually drive, so the budget matches what you spend.

Keeping the exemption for the whole lease

The tax treatment follows the commitment you make. A later change can count as a new commitment, which puts the car under whatever rules apply on that day.

• Fit accessories before delivery. Under the plug-in hybrid rules, the ATO treated accessories added mid-lease, such as a bull bar, as a new commitment, because they changed the payments and the residual. Commentary on the 2027 draft says adding accessories that increase the lease payments may work the same way. Fit the tint, tow bar or roof racks you need before delivery, and check the car stays under its line.
• A refinance or a new employer. Under the draft, a refinance or a change of employer is a new commitment. If that happens after 1 April 2027, a car over $75,000 moves onto the new rules.
• A break in the novation. In the ATO's plug-in hybrid example, an employee on unpaid leave became personally responsible for the payments. The ATO treated that break as a new commitment, so the exemption was lost from the day the leave began. Ask your provider how a break would be handled under your lease.
• Starting in a new job. Whether you can start a novated lease during probation depends on your employer's policy and the finance provider's criteria. If you are about to change jobs, ask HR and the provider before you order.

Our guide to a novated lease on an electric car lists the questions to ask a provider about term and timing.

How Rodar helps you choose and price the car for your lease

Choosing a car for a novated lease means weighing tax lines, a residual and years of running costs, all in one contract. It is a lot to take on, and it is fair to want help with it.

We can handle the car and the finance for you. For Kia, Hyundai, MG and Toyota, we get the exact grade you want priced across our network, so the lease is built on a competitive drive-away price. For Tesla and BYD, the saving comes through the novated lease itself, and our fee sits inside the lease arrangement. Either way, we then sort the finance on that price, whether a novated lease or a car loan, so you can compare the two on the car you actually want.

Whichever quote you are looking at, ask for the drive-away price itemised, with dealer delivery and every accessory shown separately. That is how you see where the car sits against $75,000 and $91,661 before you sign.

This is general information, not financial or tax advice. The 2027 and 2029 changes are announced and subject to legislation. Your own outcome depends on your circumstances, so speak with a licensed adviser or tax agent before you sign.

When you are ready, get your competitive offers, or read our FAQs first. There is no rush, and no pressure either way.

Rates and repayments are indicative only and subject to lender approval. Rodar Pty Ltd is an Authorised Credit Representative (555548) of Fintelligence Pty Ltd (ACL 511803).