How long to you keep your Golf?

[Finance_Analyst]

i also like new things, and im not sure what cars u have owned, or u just must have terrible luck, but being stranded on the side of the road in a relatively new car is pretty unlikely (i can understand a 20 yo crapper, or a holden). also, not sure what type of monstrous repair bills u have faced where it can substitute for an upgrade of a car, the biggest bill ive seen is when my brother had to fix his clutch in his b5 rs4, $3k (plus servicing).
i need to get a better accountant who can tell me how swapping cars every 2-3 years is worth the repair costs of a few hundred dollars. cos i cant see it. surely u lose a little bit.

You would need to run a business, and buy cars below the luxury tax threshold I believe. Otherwise, poor bugger salary and wage earners like me can't change every 2-3 years without taking a bath on depreciation as you say. Depreciation is still the biggest killer on cars - 50% in the first 3 years is hard to swallow, even for wealthy guys (which is why many don't buy fancy cars, or buy then 4-5 years old)

[walbjj]

You would need to run a business, and buy cars below the luxury tax threshold I believe. Otherwise, poor bugger salary and wage earners like me can't change every 2-3 years without taking a bath on depreciation as you say. Depreciation is still the biggest killer on cars - 50% in the first 3 years is hard to swallow, even for wealthy guys (which is why many don't buy fancy cars, or buy then 4-5 years old)

i do own a business (3 restaurants in fact- since 199, and the cars i own are below the tax threshold of $57k.
the thing i never comprehend is people always rattling on about "oh, i can write it off on tax", blah blah, its tax deductible, blah blah. yeh, well, i still need to earn it. thats why buying a new car every 3 years, even though u can write it off on tax, it still means u need to buy a new car every 3 years. that money has to come from somewhere, the govt doesnt just magically give u money.
im sure the tax laws makes it less painful, but its a lie to say ur better off by buying/swapping a car every 3 years. i reality, ur probably best off keeping that car for as long as u possibly can

---------- Post added at 12:42 AM ---------- Previous post was at 12:01 AM ----------

oh, and to all the people here that swap cars every 2-3 years, please outline how, in a nutshell, u are not "losing" by trading in that short a time.
my current car is is leased through the business. 4 years. in 4 years time, ill probably refinance, as im quite happy with the car. i dont see a reason to "upgrade". and then after that second refinancing term, ill make a decision if the car can be bought outright or if it is proving problematic in terms of reliability, then ill "upgrade" to a newer car. thats probably the sensible and dull choice.

[Finance_Analyst]

i do own a business (3 restaurants in fact- since 199, and the cars i own are below the tax threshold of $57k.
the thing i never comprehend is people always rattling on about "oh, i can write it off on tax", blah blah, its tax deductible, blah blah. yeh, well, i still need to earn it. thats why buying a new car every 3 years, even though u can write it off on tax, it still means u need to buy a new car every 3 years. that money has to come from somewhere, the govt doesnt just magically give u money.
im sure the tax laws makes it less painful, but its a lie to say ur better off by buying/swapping a car every 3 years. i reality, ur probably best off keeping that car for as long as u possibly can

---------- Post added at 12:42 AM ---------- Previous post was at 12:01 AM ----------

oh, and to all the people here that swap cars every 2-3 years, please outline how, in a nutshell, u are not "losing" by trading in that short a time.
my current car is is leased through the business. 4 years. in 4 years time, ill probably refinance, as im quite happy with the car. i dont see a reason to "upgrade". and then after that second refinancing term, ill make a decision if the car can be bought outright or if it is proving problematic in terms of reliability, then ill "upgrade" to a newer car. thats probably the sensible and dull choice.

One way I think is the whole monthly repayment schedule that companies like BMW offer - e.g. drive 10,000-15,000km a year max, pay a flat rate (e.g. $1,100 a month for a new 320d) and hand it back after 4 yrs at a locked in price. I went to the new 3 series launch 2 weeks ago and they were pushing that line. What it fails to cover is

1. You go over that, you pay a massive premium (although there is one for 25,000km a year but the residual is a lot lower)
2. FBT is not included (if applicable), which can be a killer
3. At the end, it seems like very expensive car rental as you have no equity in it I think (that was the old BMW one which I doubt has changed) - just pay a monthly charge and hand back. Which is why a lot of 4 yr old 3 series are back on the market and they get a new one and don't spend anymore out of pockets. That is what I think - difference between perception and reality of the owner as they get a new car for more or less the same monthly charge.

Either way, I too would like to know how it is effective tax wise as everyone from the tax man, BMW finance etc is making $$$ and isn't the consumer funding it?

[Scratchyratface]

I swap every few years and just take the hit on the loss, who cares, it's only money and I could be dead tomorrow!

[walbjj]

I swap every few years and just take the hit on the loss, who cares, it's only money and I could be dead tomorrow!

That's wat I think as well but the guys saying they dOnt lose r telling porkies.
Those schemes whereby u pay the mthly Amt and they cover servicing etc have been around fOr awhile. A mate had a box steer, ran it for 2 years then was offered a new boxster s for nothing extra except to re-sign for another 4 years. Why not?

[Scratchyratface]

I think the only time I came away without a loss was in the UK when I bought a Peugeot 106 GTI, kept it for about 12 months and they then revised the range and included leather and a few other goodies as standard. The demand was so high for the 106 GTI that I basically did a straight swap for a new one. The other 10 cars I've had I've probably lost on all of them. Bugger, I'd have a fortune in the bank if I could just resist trying out all these cars.

[Ideo]

I change over every 3 years or so.

It costs me money, but I'm going for leases from now on (high tax bracket, part business owner, lots of business kms) so I come out better for it - the amount out of my paid salary a fortnight is about equal to the amount of fuel I use so I figure I'm ahead.

[Lucas_R]

I'll be keeping mine for a million billion years. Na, in all seriousness, providing it proves to be a good reliable car ill most likely keep it for 6-8 years.....possibly longer. I do very few kilometres (7,500km since new and it's 1yr old next month) so it will always have low km's.

[7R]

i also like new things, and im not sure what cars u have owned, or u just must have terrible luck, but being stranded on the side of the road in a relatively new car is pretty unlikely (i can understand a 20 yo crapper, or a holden). also, not sure what type of monstrous repair bills u have faced where it can substitute for an upgrade of a car, the biggest bill ive seen is when my brother had to fix his clutch in his b5 rs4, $3k (plus servicing).
i need to get a better accountant who can tell me how swapping cars every 2-3 years is worth the repair costs of a few hundred dollars. cos i cant see it. surely u lose a little bit.

You are correct... you absolutely need to get a new accountant.

No I do not want to own a DSG out of warranty. I see the potential risk of replacing that as higher than the loss of value from changing every couple of years.

For sure it costs - and it is a cost I am happy to pay.

It works for me but YMMV so individuals should get their own advice. In the end between what I paid and what I sell it for, and what I get in tax refunds I should be out of pocket for running costs only plus maybe 10%. For me (not you, I know) that is acceptable and a good deal to enjoy a new car.

How do you deduce that I hate money because I change cars every two years? Do you hate money because you like a drink, or want to go on holidays overseas, or because you like nice clothes. What about the patrons at any of your four establishments? Do they hate money because they choose to buy a meal instead of getting groceries and cooking at home where it is cheaper? All those lifestyle purchases like restuarant meals, jeans, tv's, computers, alcohol, cigs, travel, etc devalues so fast so they must hate money... Your argument is good for all situations and applications...

I accept it may not be your idea of a wise way to spend money but as long as I am only spending mine and not yours I can't really understand why you care or why it is such an affront? Whether I have too much money or not - whether I hate it or not - is for me to judge - but thanks for asking.

Don't you think it is kind of an unusual comment on a car forum... where people spend all sorts of money on cars over and above what ordinary people generally do... tuning, mods, audio, kits, wheels, racing etc... The same argument holds true for choosing to buy an R over a 77 or a Golf over a Kia...

[walbjj]

the reason i brought the "hating money" issue, is that it is well known that new motor vehicles are by far the worst "investment" that a person could spend their money on, besides jewellery, but thats another story for another time.
therefore, for a person to say they change cars every 2-3 years, when that time period has been established as the most crucial time where a new motor vehicle depreciates the fastest, then it raises the question, "hey, this guy must love pissing money away as he is changing his car so often. he would do better by keeping it longer, say 5-7 when the depreciation hammer lessens.

for the record, i do not drink, nor smoke, nor take many if any holidays. i despise fashion labels, and hate trinkets (jewellery), i also rarely eat out as i usually eat where i work. ive learnt in my somewhat brief lifetime that toys such as those dont really add anything to my existence.
i do like nice cars, but cant justify anything more than $60k nowadays, as my brothers rs4 ownership experience soured me on expensive cars and the accompanying expensive running costs.
u cant really compare a person eating out and cooking at home because they are such small purchases, $10-20 compared to losing thousands, it has less buyer shock, its less "in your face". but i understand what ur trying to say. everyone is different, they value and prioritise things differently.
i wasnt trying to cause offense, i was genuinely interested in how swapping new cars so quickly could be a sound business and financial decision, as based on mine and my families experiences of purchasing over a dozen new cars has proven otherwise, even factoring in the tax benefits.
anyway, enjoy the cars people. i know i enjoy driving mine

[PGS_AUS]

You would need to run a business, and buy cars below the luxury tax threshold I believe. Otherwise, poor bugger salary and wage earners like me can't change every 2-3 years without taking a bath on depreciation as you say. Depreciation is still the biggest killer on cars - 50% in the first 3 years is hard to swallow, even for wealthy guys (which is why many don't buy fancy cars, or buy then 4-5 years old)

The luxury tax threshold doesn't necessarilly make a difference. Depreciation wise the car has a set percentage that it can be written off at per year anyhow and this is further modified by its actual percentage of "for business" use. If you really want to get a maximum write off buy a ute over 1 tonne carrying capacity and you can get a 100% write off over the term of the depreciation schedule without having to keep logs to ascertain actual business related useage. From memory there is also an addittional $5K write off available on qualifying vehciles bought by a company after June this year.

The write down in the assets (the cars) value only really presents as an add back on the EBITA and as an offset against what is presumably going to be the company tax rate so you aren't generating enough write off to even come close to covering the actual value of the depreciation in the cars value.


The thing to remember is that if your business flourishes or fails based on what your depreciation write off on your car is then its probably not in great shape anyhow. If your business is making enough that you can "have a little fun" and can still make use of some write off by buying the car or cars you like then why wouldn't you? It's not like you can take the money with you when you're dead and most sane people work so that they can enjoy their down time more. Its the reason I'm looking at an R as opposed to the "accountant sanctioned" Amarok !

[walbjj]

i thought it was an accountant recommended camry

[jamesatfish]

i was genuinely interested in how swapping new cars so quickly could be a sound business and financial decision, as based on mine and my families experiences of purchasing over a dozen new cars has proven otherwise, even factoring in the tax benefits.
anyway, enjoy the cars people. i know i enjoy driving mine

Personally I think your second sentence answers the first.

Unless you're buying ultra-collectable cars and wrapping them in cotton wool, then you're 100% correct that cars are not an investment, and other than the vehicles I buy for my employees they're not a business decision either. I can't speak for GTi11.5 or anyone else, but for me cars are a great source of enjoyment and buying a new one is about far more than the impact on my bank account or tax return.

[walbjj]

while its true that i may enjoy driving a nice car, the reality is, seeing the value of some high end cars plummet must have some effect for owners when it comes time to sell.
take for instance my brothers b5 rs4, brand new, that car was a shade over $170k, my brother bought it second hand, 1.5 years old, with about 20k km on it, for $125k. holy jesus, no amount of accounting wizardry is gonna hide the $45k blackhole that just occurred there. im guessing the original owner must have went busto.

[jamesatfish]

while its true that i may enjoy driving a nice car, the reality is, seeing the value of some high end cars plummet must have some effect for owners when it comes time to sell.
take for instance my brothers b5 rs4, brand new, that car was a shade over $170k, my brother bought it second hand, 1.5 years old, with about 20k km on it, for $125k. holy jesus, no amount of accounting wizardry is gonna hide the $45k blackhole that just occurred there. im guessing the original owner must have went busto.

For sure your brother got a great deal on the RS4 compared to the new car price, but don't disregard the possibility that for the original owner the $45k loss was insignificant. The numbers might be different to the Golf scenario but the principle is the same - if you get enjoyment out of buying a new car every few months/years then the economic cost can be irrelevant.