- April 14, 2024
- Posted by: legaleseblogger
- Category: Related News
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### Current Situation Analysis
The current situation involves a daily commute of 52km each way to work, resulting in significant fuel expenses due to a gas-guzzling car. In addition to expensive services and parts for the sports sedan, insurance costs are above average. The option to sell the current car for $35k presents a potential opportunity for change.
### Consideration of Electric SUV Purchase
The decision to purchase an electric SUV, specifically the BYD Atto 3, is being considered to better accommodate a family of four. Calculations suggest potential cost savings in terms of running costs, servicing, and insurance with the new vehicle. However, a small loan may be necessary to bridge the price difference between the current car and the electric SUV.
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Not AusFinance ideal, but I did the same. Sold the family ICE SUV which was $140+ a week in fuel alone (plus had started needing some multi $K fixes) with a Model Y on a lease.
There would have been better outright financial decisions, but there are definitely pros to having a warranty on a new car.
Can you do a novated lease? The FBT exemption for EV novated lease makes it very cost effective.
I just got a new Atto3 on a NV to replace my 10 year old ICE car. There were obviously more economic options, but sometimes decisions aren’t just based on money. If the time spent in the car is more enjoyable and that gives you more value, then it’s worth it. The money:value ratio is the thing that should be considered, and that takes into account much more than just “what’s my total financial outlay”.
Sell your $35k sports car and buy a $35k second hand Toyota hybrid or something if you want the legit economic answer
Here comes the “just buy a camry” crowd 🙄
Financially i think you’re on the money (pun intended). However there is a big caveat. I have been in automotive parts for 16+ years and there is one big trend that i see from the new car brands coming out of china. More often than not, we don’t have listings on spare parts for them and if we do, supply is very low and prices are high. This situation will change, but it’ll take a few years or so, just like it did with Hyundai and Kia. When they first arrived on the Australian market, supply of replacement parts was terrible. Now every other aftermarket parts maker has stuff for them. So my advice would be to proceed with caution.
What would be worse then getting a loan to get an EV?
Getting a Hybrid car and still having to pay fuel costs…
At least with an EV you can run it very cheap.
I’m skeptical that 10k+interest is going to save you money.
Consider a NV instead, the tax incentives for EVs are pretty good.
Look into a novated lease, we did the same 12 months ago, sold the wife’s Forester and got the BYD on a lease, we pay slightly more on the repayment than what we did previously but once you factor in rego, insurance and not having to put fuel in we are miles in front, the BYD is a great little car as well, really fun to drive and more charging stations seem to be added by the week!
Depreciation is one of the biggest costs to consider when buying new cars
Check the cost of comprehensive insurance on a Atto 3. You might regret your decision.
If your employer accepts novated lease, this may be the best solution. You could park the $35,000 in an offset account against your mortgage
Yes I would do this. EV’s are so convenient when you get used to them. And apart from insurance (which is expensive now no matter what you have) the cost of ownership is very low.
Like you, I drive about 3 hrs a day, costing me $130 per week in petrol.
I previously owned an ICE car which was 16 yo (bought at 3yo with no finance) which has served me well over the years but was costing a lot in patrol.
So I started to look into a novated lease for an EV after getting new job where my employer offers it. I’ve heard about the EV FBT exemption, but was wary since I hear so many on this sub saying NLs are a scam, only benefit the leasing companies etc.
Did the sums, worked out – the savings were significant, plus I get to enjoy a brand new car. Under an EV novated lease the ATO allows 4.2c per km to be claimed.
As I drive about 35k kms per year, I worked out that I’ll basically drive for free using the ATO claim rate plus cheap AGL NIght EV Plan of only 8c per kWh from midnight to 6am.
I’ve had my EV for 5 days now, love it.
Don’t even bother with a hybrid, as it’s an essentially a petrol car: go BEV (battery electric car).
100% novated lease only. Tax savings are significant (100% of your pre-tax money can be used for the car payments and maintenance etc). Petrol cars is not worthwhile unless you are earning huge $$, it has a different tax policy.
Sell your current car, park in offset, switch with an Atto 3 via novated lease.
It was a very good outcome for us, sold our failing car and got a reliable for what we see as good value.
Does not having $10k in as an emergency fund (that you could potentially use without going into debt) mean you are living paycheck to paycheck?
Did you add in to your calculation the charging of the car at home during the night?
Do you currently have a 2nd car for your family that you use? Or is your car the only car?
If its your only car then a family orientated car would be a good choice.
If its just a 2nd car the best option is to just get rid of it if you are close to public transport. As suggested buy yourself an e scooter or e bike to and from transport
Again, if its just a 2nd car I highly doubt a brand new large car is worth it. You would be better off with a 5-7yr old small car
As Ben malla says if it makes sense it makes money
From a financial perspective, you will need to consider how long you’ll likely own the EV.
Depending how long you’re intending to own it, you’ll need to factor in things like more regular tyre replacements (due to the weight of EVs, tyres wear more quickly), replacement costs of the battery/cells and resale value (i.e. depreciation).
If you can afford to service the loan, you should be fine.
Buying a car isn’t solely a financial decision. If it suits your circumstances and you’re not stretching yourself financially, by all means upgrade.
If you’re getting electric are you charging it from solar at home? Cost to charge a battery from the grid or retail charging stations is not that cheap so factor depreciation and interest. Also redundant environmentally to charge from grid as a lot of the grid is still powered by coal. You’d be burning carbon at the power source rather than engine.
The only economical reason to go into debt is an appreciating asset cars are not it… most of the time
Just a suggestion to consider but a few mates of mine bought cheaper cars to run around in that cost very little to run. You could do that and keep your performance car for weekends.
Do you have a mortgage or other debt? That is key for a novated lease.
I urge you to game out all the costs for both options over, say, 5 years. . It will apparently cost you about $20 a week to do the same Ks. Assume the resale on the BYD is poor.
How long are you planning on keeping it? Be prepared for reduced economy over time and $30K to replace batteries when they inevitably die.
Mate my situation was identical to yours last year, 50km round trip every day, $100 a week on petrol. I novated leased an MG ZS EV (almost went with the BYD) and I couldn’t be happier – in the last 12mo I’ve spent significantly less on the lease than I did in the previous 12mo on my old Volvo. Highly recommend the switch
You’re saving money each month now to then suffer greater depreciation at the end.
The BYD is newish I’m thinking so has barely started its depreciation curve.
People.never seem to consider depreciation only running costs.
Nothing wrong with getting a BYD, good tech and cheap to run especially if you already have solar.
Just watch out for insurance cost but then again probably on par with your current car. Second hand Atto 3 are about $40k or less but Atto 3 is a fair bit smaller than RAV4 so test drive before you commit.
If this is for a business, you will be able to deduct the interest expense on the loan as well.
Toyota Prius you can pick up old models 2010-2012 for around 10k 4.5L per 100k and you’ll be printing money
Have you taken into account other expenses and accessories? – my friends who bought electric cars have more expensive insurance prem, extension to home solar etc which add up to cost. These can be easily forgotten if you look at the car expenses in isolation.