With petrol prices continuing to rise over the year as anticipated, Australia’s transition to EV driving has been going from strength to strength, to say the very least.
Virtually all auto and green market analysts across Australia have recorded unprecedented figures across EV sales and one thing is becoming increasingly clear: Aussie consumers are seeing electric vehicles as the solution to Australia’s dependence on foreign fuel supply.
However, EVs are by no means affordable for most Australian consumers — so how are we funding this green shift? Fortunately, with more EV models flooding the Australian market every year, car shoppers are enjoying a growing variety across both new and secondhand electric vehicles.
Generally speaking, EV buyers have four major buying strategies available to them; these being:
- Buy outright
- Buy with finance
- Take out a novated lease
- Buy secondhand
Buying outright isn’t an accessible strategy for the majority of Aussie consumers, so let’s focus on the other three for today’s write-up. Whether you choose to finance a new car, consider a novated lease or buy a secondhand model, understanding the pros and cons of each approach can help you find an option that suits your budget and lifestyle.
1. Car finance: Access the latest EV features and safety technology
A new EV can come with a higher upfront price tag than its petrol or diesel counterparts, which can make financing a better option for buyers who don’t want to compromise and buy secondhand.
EV car loans can help eligible buyers spread the cost of purchasing a vehicle across regular repayments, rather than having to cover the entire purchase price upfront. These green car loans empower EV shoppers to secure a vehicle with all the right features and safety specs, rather than having to compromise on an older, secondhand model just to avoid a higher ticket price.
For families looking to prioritise safety and reliability from their EV, taking advantage of car financing options is growing preferable, especially in EV markets where vehicle values are still trending higher than average.
Just remember, borrowing comes with additional costs. So before you consider taking out a car loan, be sure to consider all contributing factors like current interest rates, fees with your loan provider, loan terms and total amount payable, as well as whether the repayments can be sustainably accommodated in your existing monthly budget. An informed borrower is a responsible borrower.
2. Novated leasing: A salary-packaging pathway to EV ownership
For eligible employees, novated leasing can offer another avenue for investing in your very own electric vehicle. In the simplest terms, novated leasing options allow for salary packaging, providing a cost-effective pathway for working professionals looking to make their EV switch. By using their EV loan to reduce their taxable income, novated leasing makes EV purchasing more accessible for millions of everyday Aussies.
For working professionals who receive a salary from an employer that offers novated leasing, this EV buying strategy can be a suitable alternative to taking out an EV loan with a bank or non-bank lender. However, it’s important to keep in mind that novated leasing isn’t the cheapest option for every driver.
The overall costs, tax treatment, lease terms and end-of-lease arrangements all need to be considered before deciding. Government rules and EV tax concessions can also change, so it’s always recommended you check the current eligibility requirements for novated leasing arrangements before committing.
3. Buying a secondhand EV: A budget-conscious alternative
As more EV manufacturers enter the Australian market, Aussie consumers can also expect to find more "almost" new and secondhand EVs across their local dealerships as well as in car sales listings online. The growing number of secondhand EVs on the market are naturally providing spend-savvy car shoppers with substantially more options.
Opportunities to buy secondhand are making the transition to EV driving infinitely more cost-effective for millions of everyday Aussies — but there are still pretty costly pitfalls along the way here too.
As is the case with buying a secondhand combustion engine vehicle, buying a used EV also demands a good amount of due diligence — and not just to avoid buyer’s remorse. You also need to make sure you’ve done ample research on the model you’re looking to invest in, to ensure you’re in the loop with any identified operational issues or commonly reported manufacturer faults.
Battery issues are also a major consideration point when buying secondhand EVs. EV batteries are amongst the most important components for electric vehicles and one of the most costly to replace. With this in mind, prospective buyers should always inquire about the condition and available battery-health information before purchasing.
A pre-purchase inspection can also help identify potential mechanical, electrical, or charging issues. Buyers should conduct their own thorough independent research into any known problems or recalls associated with the specific makes and models they’re looking at and check whether that particular vehicle has been serviced according to the manufacturer's recommendations.
For an EV that's more than a year or two old, the ownership history can also provide useful information. Be sure to look at how many previous owners the vehicle has had, how it has been driven, and check out the logbook for evidence of regular servicing and maintenance.
All up, these are the considerations market analysts recommend when looking to buy an EV secondhand:
Conduct independent research using unbiased, third-party sources (that is, car comparison tools, car review sites, ANCAP safety ratings, and so on):
- Establish a firm buying budget
- Book pre-purchase inspections
- Inquire about battery health
- Request full ownership and servicing history
Which buying strategy is the right fit for you?
The right EV buying strategy all depends on your circumstances. Financing a new EV could suit buyers who want the latest safety features and technology, but prefer to spread the purchase cost over time.
Contrastingly, novated leasing may appeal to eligible employees who want to use salary packaging as part of their EV strategy. And finally, buying secondhand can reduce the upfront cost, provided you're comfortable doing additional checks on battery health, vehicle history and condition.
Whichever strategy you choose, look beyond the price on the sticker. Consider the total cost of the vehicle, including finance or lease costs, insurance, charging, servicing and registration, and make sure the arrangement suits both your current budget and your longer-term driving needs.
