Buying Car under Business. Best Option?

PixelPaul on 15/10/2018 - 11:07

I have seen a few threads about what is the best way to buy a car, but they all seem to be personal purchases.

I am looking to buy a car between $10K and $15K but i have been told it is best to buy it on some kind of lease or plan. After a bit of research i am finding a few different types but they all say they are the best for business car purchases.
I would prefer to pay it off instead of outright so i have the money for other business needs. Maybe over 4 years.
My business does pay GST so one that can claim back the GST would be good. And where i can claim all the car expenses too.
It would be nice to own it at the end but an option to upgrade or change over to a newer can would always be a nice option to have just in case, but not sure if that would work on a 2nd hand car.
Does anyone have any recommendations?

Automotive Car

Comments

  • Euphemistic on 15/10/2018 - 11:11

    Talked to your accountant?

    • PixelPaul on 15/10/2018 - 11:17

      i am going to go see her in a few weeks time, but she is never really clear and i would like to have some other recommendations when i go see her.

      • HighAndDry on 15/10/2018 - 11:40
        +13

        but she is never really clear

        You might want to get a better accountant if coming to the internet seems to you to be a better alternative than your paid professional.

  • HighAndDry on 15/10/2018 - 11:42

    If your business is a separate company, look into novated leasing. If your business is not a separate company…. look into making it a separate company.

    • PixelPaul on 15/10/2018 - 11:43

      it's a PTY LTD :-)

      • HighAndDry on 15/10/2018 - 11:49

        Ah good. Then look into novated leasing; it's not always the best option and depends on your circumstances…. which you need to talk to your accountant about unfortunately.

  • hawkeye on 15/10/2018 - 12:14

    If your going to buy something for 10-15K interest would be around 8-12% you'd be better of paying cash. Private sale wouldn't have any GST but full depreciation for the year if 100% deductible.

    15k @12% = $334 PMx60
    30K @2% = $526 PMx60

    New car if you can still get a dealer 2% loan paying 12K more but get back 2.7K GSt and after 5 years it's still worth 10K.

    • HighAndDry on 15/10/2018 - 13:02

      OP could conceivably claim the interest in their taxes, depending on the business income, etc, it could work out better. But that's kinda the problem, it really depends on the numbers here.

    • spackbace on 15/10/2018 - 13:35

      No dealer is offering 2% finance… If they are, it's because you're paying more the car than a cash buyer.

      Base rates are in the 4s

      • hawkeye on 15/10/2018 - 14:18

        If they are, it's because you're paying more the car than a cash buyer.

        Cash is always King.

        2.9% I was close. Saw an ad on the Rangers for cheap interest.
        https://www.ford.com.au/latest-offers/brisbane

        • spackbace on 15/10/2018 - 14:42

          That's on Focus RS.

          Again, you're paying more for the car because of it.

          And no, cash is not king, dealers will do a better deal if they think the customer is getting finance. "Can you do cheaper for cash" is an outdated philosophy.

          • hawkeye on 15/10/2018 - 18:12

            @spackbace:

            No dealer is offering 2% finance… If they are, it's because you're paying more the car than a cash buyer.

            Base rates are in the 4s

            And no, cash is not king, dealers will do a better deal if they think the customer is getting finance. "Can you do cheaper for cash" is an outdated philosophy.

            Yes it all makes sense now I can see what we're dealing with.

            • spackbace on 15/10/2018 - 18:23

              @hawkeye:

              Yes it all makes sense now I can see what we're dealing with.

              Wut?

  • PixelPaul on 15/10/2018 - 12:32

    the thing is my business gets $400 a month for a contract i have, so i was thining of putting that towards the car, instead of outright buying.

  • spackbace on 15/10/2018 - 13:37

    Leases etc will only cover a certain age vehicle afaik, so unless you're looking at small cars I think the car might be too old to moated lease (you haven't told us what you're hoping to buy)

    https://www.leaseplan.com.au/drivers/how-get-novated-lease/s…

    • It must be no more than four years old and travelled less than 100,000 km at lease commencement 
    • It must be no more than seven years old with no more than 200,000 km at the end of the lease
  • Mumbles on 15/10/2018 - 13:38

    You and/or accountant really have to go over all the specifics for your situation.

    For a $10,000 car and business with low taxable income ($400 p/m) the tax savings are probably not going to offset the high setup fees of a novated lease, the loan financing, your accountant's fees.

    Personally I'd just pay in cash for a non-tax deductible vehicle like a sports motorbike or a depreciated used car. No tax regrets, less headache, less paperwork, simpler taxes. If you put a price on your own time then you could be losing money.

Login or Join to leave a comment
Login Join