Generally speaking if you do enought business KM to justify claimimg more than 60% business usage you are better off financing the vehicle yourself (Commercial HP, loan or whatever) and claiming a large tax deduction at tax time.
If you do a lot of KM you can't claim, travel to/from work for instance a novated lease may be the answer.
If you are in the top tax bracket you can significantly reduce the tax you pay as the novation comes from your pre tax pay and you effictively get a 47% deduction on the cost of your car and running costs.
You need to carefully investigate the number of KM you will do as Fringe benefits tax is applied to your lease payments on a scale that drops the greater number of KM you do. This will change the effective deduction you will get and may make a lease unattractive on a car that only does limited KM. (less than 20,000 per year)
You need to consider the value of the car at the end of the lease. There are minimum payout figures for the number of years of the lease.
they are something like:
12 months = 65.00%
24 months = 55.00%
36 months = 45.00%
48 months = 35.00%
60 months = 25.00%
It can be an expensive excercise if you lease an XR8 based on a $55000 purchase price for 3 years and then put 180,000 Km on it and find your trade in value is $18K. Thats $7K that you have to find to get out of the vehicle.
My figures are probably not very accurate, Ive only put them in to illustrate the things you need to think about. As stated above, ask your accountant what he thinks and then consider it carefully.
Also you need to realise that changing cars mid way through a lease isn't really a viable option.
Regards,
Tote
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