Thread: Leasing - What will I end up with!?

Originally Posted by ramblingboy42

I'm interested to know why you say this......my wife has a new novated lease and If I can I will too.

I presume that Pat is talking about the progressive removal of the FBT thresholds, where the greater the distance driven in an FBT year, the lower the Statutory Percentage (%age of the cost of the car used for calculating FBT cost, and therefore the amount that has to come out of your post tax salary to pay for the FBT liability).

It's still worth it for the moment, but the thresholds are not as advantageous as they were. See here.

It is not as good as the good old days but better than the recent past. PM Julia has changed it to flat rate 20%....

"A flat statutory rate of 20% applies (subject to transitional rules), regardless of the distance travelled, to all car fringe benefits you provide after 7.30pm AEST on 10 May 2011 (except where there is a pre-existing commitment in place to provide a car).".

My first ever lease was gold! Bought on "government contract price", leased and sold privately for more than I got it new. The good ol days!

Originally Posted by sheerluck

I presume that Pat is talking about the progressive removal of the FBT thresholds, where the greater the distance driven in an FBT year, the lower the Statutory Percentage (%age of the cost of the car used for calculating FBT cost, and therefore the amount that has to come out of your post tax salary to pay for the FBT liability).

It's still worth it for the moment, but the thresholds are not as advantageous as they were. See here.

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Originally Posted by JamesH

Wow. I'm in the same place. Same car same colour options etc. I can do a salary sacrifice at work and typed in the figures on the website. My salary(a bit more that average wage). 5 years but 15000 k a year. The fortnightly costs looked pretty horrendous. $700-$800. And they told me I'd save less that $1800 a year. I could refinance my mortgage and buy it outright.

Their figures factor in fuel, insurance etc which doesn't count in the buy outright sums. But buying outright includes my mortgage repayments (piddling). I just can't get my head around it all. Really need someone to look at my case and help me out.

Looking at taking up drinking Pimms James
Andrew

Originally Posted by LandyAndy

Looking at taking up drinking Pimms James
Andrew

I can dream. And it seems to agree with you.

Originally Posted by Tombie

Any legal modification as per insurance requirements...

Also any plug-in device that might be lying around unused...

Been awol for a while.....a D4???? WTF

Nice.

I emailed your rovertech email address recently with some queries. Still using that?

FBT - At 20% regardless of km travelled its still pretty good. There was a downside to the old system that no one ever took into account . People would try to do more km to get the fbt rate down. The issue was that to do 25,000km rather than 15,000km (the old cut-off points) meant about 1 more service per year ($300), approximately 1000L more fuel ($1300) and significantly increased depreciation due to more km (more than $1000 per year). This could be a real killer at the end of lease when you found yourself with a residual payment that was greater than the value of the vehicle. Doing 25000km rather than 15000km meant you paid less FBT BUT the increase in costs could be higher than the saving in FBT.
One aspect of novated leases that is rarely taken advantage of is the fact that the fbt is paid on the purchase price but all repairs and running costs are 100% deductable therefore if you were to lease a "classic" car and do a lot of restoration then the restoration costs can be fully tax deductable. There may be some issues with the age of the vehicle and whether the leasing company or salary packaging mob will accept it but in theory this would be kosher.

I highly doubt whether any packaging company would let you package a classic needing restoration. They'll also calculate, or get you to validate the running costs. If the running costs are ridiculous like your spending $10000 on " servicing and repairs" when they'd expect it to be $2000... flashing lights appear on their packaging law "calculators" and the ATO would be very quick to ask you to prove your really eligible for packaging and is the vehicle essentially a work vehicle.

If you have finance on it, most novated leases have to be on a vehicle upto 3 years old at the beginning of the lease so finance companies or leasing companies wouldnt touch it.

However we as staff working for a PBI are able to package any vehicle that is clearly used by the employee if it's not under finance. We actually own both cars outright, in my wife's name, and I technically rent both vehicles from her under an associate lease. We save quite well out of this and effectively it gives me a $7500 payrise through effective tax savings. This only really works well because SWMBO earns nothing, well she works a little but our investment properties are in her name so she earns $0 or less according to the ATO.

My packaging is quite complicated.... Two cars, laptop, phone, tuition fees for the kids etc. We outsource it all to an interstate mob. We send them our info, they propose a packaging budget which although for most people is way to difficult tax calculations, it ends with: you save $x with this package through a tax saving of $x.

I am waiting for someone to show me how it's better for me to buy a new vehicle under finance, than it is to keep my older ones that we owe nothing on, due to tax savings and residuals. When this happens I'll be into a D4 in a flash!

It is all numbers though and quite basic really.

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