Inflation Moderated in April 2026 — Good News for Car Buyers?
Headline inflation fell to 4.2% in April 2026. Here's what that means for novated lease customers and EV buyers right now. Plain-English breakdown.
New figures released by the Australian Bureau of Statistics and reported by the Treasury show that headline inflation fell to 4.2 per cent in the 12 months to April 2026, down from 4.6 per cent in March. Monthly headline inflation also dropped sharply to 0.4 per cent, compared to 1.1 per cent the prior month — better than the market median expected. Trimmed mean inflation, the RBA's preferred measure, came in at 3.4 per cent, slightly up from 3.3 per cent (Source 1).
Treasurer Jim Chalmers acknowledged the improvement but was direct: inflation "remains much higher than we'd like" and the ongoing conflict in the Middle East continues to add pressure to global supply chains and energy prices. In other words, the direction is good — but we're not out of the woods yet.
What this means for novated lease customers
For PAYG employees thinking about a novated lease — particularly on an EV — the inflation picture matters in a couple of practical ways.
First, vehicle pricing and interest rates are still elevated. Residual inflationary pressure means the RBA has kept rates higher for longer, which flows through to the finance rate embedded in any lease. If trimmed mean inflation continues to moderate, rate relief could follow — but anyone quoting you a specific timeline is guessing.
Second, the FBT exemption on eligible EVs remains one of the few structural tax breaks available to employees right now. It doesn't change with the inflation number, but in a high-cost environment the pre-tax treatment of a novated lease — covering finance, running costs, registration and insurance from gross salary — has more bite than it did when inflation was low. Every dollar you redirect through a novated structure is a dollar that doesn't attract income tax or Medicare levy, and that potential saving is worth modelling properly before inflation does ease and rates fall.
According to the Treasury release (Source 1), the government views inflation as a "big focus" and is watching global developments closely. That uncertainty is exactly why locking in a fixed-rate novated lease structure can make sense for some employees — you know your fortnightly budget impact from day one.
Common questions
Does inflation affect how much I save on a novated lease?
Indirectly, yes. Higher inflation tends to mean higher interest rates, which raises the finance cost inside a lease. The pre-tax salary treatment still delivers potential savings regardless, but the total cost of the lease can shift with the rate environment.
Is the EV FBT exemption still available in 2026?
As of the date of this article, eligible battery electric and plug-in hybrid vehicles under the luxury car tax threshold can still attract FBT exemption under the existing legislation. Always verify current eligibility with your employer or a licensed adviser — rules can change.
Should I wait for inflation to fall before signing a novated lease?
Timing the market on interest rates is difficult even for professionals. If you're planning to hold the vehicle for the full lease term, the pre-tax benefits of a novated structure are available now regardless of the rate environment. A millarX consultant can show you the numbers against your specific salary.
What does 'trimmed mean inflation' mean and why does it matter?
Trimmed mean strips out volatile price movements at the top and bottom of the basket — it's the RBA's preferred read on underlying inflation. At 3.4 per cent it's still above the 2–3 per cent target band, which is why rate cuts remain uncertain.