If you’re considering a new car but aren’t quite ready to make the switch to a fully electric vehicle (EV), a Plug-in Hybrid Electric Vehicle (PHEV) offers the perfect compromise. You can still enjoy the massive tax savings from the FBT exemption, all while keeping the flexibility of a petrol engine for longer trips. However, you’ll need to act fast—the FBT exemption for PHEVs expires on 31st March 2025.
Why PHEVs Make Sense for EV Hesitators
It’s no secret that EVs are becoming more popular, but they’re not for everyone just yet. Many buyers have concerns about:
✅ Charging infrastructure – Will I be able to charge easily?
✅ Range anxiety – What if I run out of battery on a long trip?
✅ Upfront costs – EVs can still be expensive despite government incentives.
This is where PHEVs offer the best of both worlds. You get a battery-powered electric drive for short daily trips but still have a petrol engine for longer journeys. No need to worry about running out of charge or finding a public charging station!
With a PHEV, you can:
🚗 Drive short trips on electric power alone – Many PHEVs have an electric range of 50-100km, which covers most daily commutes.
⛽ Use petrol for longer trips – No range anxiety, no waiting for a fast charger!
⚡ Charge at home like an EV – But if you forget to charge, the petrol engine is always there as a backup.
FBT Exemption = Big Savings on a Novated Lease
The Federal Government introduced the Electric Car Discount Bill in 2022, which exempts eligible EVs and PHEVs from Fringe Benefits Tax (FBT) when they’re salary-packaged through a novated lease.
This means huge financial savings—but only for PHEVs leased before 31st March 2025. After that, PHEVs will no longer qualify for FBT exemption, making them significantly more expensive under a novated lease.
PHEV vs Petrol vs Hybrid – A Cost Comparison
Let’s compare the Kia Sorrento across its three powertrains to see the real savings when using a novated lease:
| Drivetrain | Recommended Retail Price | Out-of-Pocket (Fortnightly) | Estimated Savings Over 5 Years |
|---|---|---|---|
| PHEV | $84,660 | $589 | $42,384 |
| Hybrid (HEV) | $70,330 | $719 | $17,232 |
| Petrol (ICE) | $68,590 | $721 | $18,046 |
(Figures based on a Paywise novated lease quote for a driver on a $90,000 salary, 15,000km per year, over a 5-year lease term.)
Despite being more expensive upfront, the PHEV version offers the lowest out-of-pocket costs. Why? Because it benefits from the FBT exemption and lower running costs, making it over $42,000 cheaper over five years compared to petrol and hybrid alternatives.
PHEVs Keep Your Options Open
If you’re unsure whether EVs are right for you, a PHEV allows you to dip your toes into electrification without full commitment. You’ll enjoy:
✅ Lower running costs – Fuel savings thanks to electric driving.
✅ Tax benefits – Salary packaging reduces taxable income.
✅ No charging stress – Charge at home when convenient, but rely on petrol if needed.
✅ A future-proof investment – As cities push for lower emissions, PHEVs are still cleaner than petrol vehicles.
Act Now – The FBT Exemption Ends Soon!
After 31st March 2025, PHEVs will no longer qualify for the FBT exemption, making them thousands of dollars more expensive to lease. If you want to secure one of the last PHEVs eligible for this huge tax break, now is the time to get a quote from Paywise and lock in your savings!
🚗 Not ready for a full EV? A PHEV is your smartest option.
💰 Take advantage of the FBT exemption before it’s too late!
📅 Get a novated lease quote today and start saving.
