Small Business Tip – How to Pay for Your New Car

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Small Business Tip
A Small Business Tip to maximize your EOFY deductions

Here’s a Small Business Tip – If you’re paying cash or financing your next new car purchase, and you want to maximize your tax deduction, you should follow these rules. Generally, car dealers will invoice you for the total of the vehicle including on road costs of Registration, Stamp Duty, Compulsory Third Party and Dealer Delivery Fees. You’ll then include that invoice in your expenses for the month, and later your accountant will ‘write’ off’ the invoice over time – probably around 5-7 years if you keep it that long or the actual time you end up keeping it. So the (let’s use a $30k new car) write back is $6600 in the first year, $5148 in the second using a 22% depreciation model.

Small Business Tip
The Australian Taxation Office allows accelerated depreciation for another year

HOWEVER, you can actually write off some in the actual month/year of purchase if you take some advice from me. Ask the dealer to make out two invoices – one for the car and the other for the government charges and delivery fee. Let’s say in our $30k example that the on roads and delivery fee is $3595 and the car is $26,405. In this financial year, you can write off $3595 AND $5809.10 or a total of $9404.10. And you can also claim the GST you paid on the new car of $2400. So in this financial year, if you’re buying a $30,000 car, already nearly 1/3rd is written off as well as claiming the GST.

And treat this as a final reminder for the 2017 financial year as to the Federal Government’s Accelerated Depreciation Program. If you’re a small business turning over LESS than $10 million dollars per annum, you’re eligible for an instant write off for any asset that your company buys worth $22,000 ($20,000 ex GST) or less.

Warning: I’m not an accountant, nor do I work with the Australian Taxation Office, so don’t take my word for it. Consult your own accountant or taxation advisor for the best advice.

If you’d like someone to assist you with the purchase of your next new car simply email your details to [email protected] or phone 0418 748 498

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Welcome!

Hello and welcome to my new website thecarguy.com.au!

I know that there’s a lot of websites that offer car reviews, car road tests, opinions on various cars and the like. What makes this site different is that I’m not going to bore you with technical information about the various cars that I review.

I’ve been in the car business for over 39 years. I’ve read the motoring magazines cover to cover. I’ve read the online reviews until my eyes were square. Everywhere that I go, I find motoring journalists talking about car speeds – 0 – 100 km per hour, standing ¼ times, the inclination of this and that at 150klm per hour on a 12.5% gradient curve, in rainy weather – and other stuff that bores me no end.

thecarguy.com.au is taking a different path on the journey to helping you purchase a new car. I’ll do my best to advise you on what I consider to be the most important information when it comes to that major decision to purchase a car. Interior room, features of the car, fuel economy, safety, service prices, resale and lots more. I’ll tell you what I like about a particular car and as importantly, what I don’t like, to find at least to be less than I think a car should have. .

And I’ll ask for your opinion. Take some pics of what you’re driving and tell me and our audience what you particularly like or dislike about your car. Because besides prospective new car buyers, there’s a lot of people who’ll read your comments as used car buyers.

So, jump on board, strap yourself in and let’s start out on the journey with The Car Guy.

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