Re-sale Value on 6R Polo GTI Discussion

[Bassik]

Might be also important to note that the new law that Kevin Rudd has annouced puts a massive halt on leasing cars companies as there is no longer any tax benefits.

This may have a big impact on resell value but may also boost the small petrol saving cars ie Polo due the savings from not being worth it to lease cars via businesses anymore.

[kaanage]

the new law that Kevin Rudd has annouced puts a massive halt on leasing cars companies as there is no longer any tax benefits.

Wow - BMW and Mercedes must be $hitting bricks with this one. This makes me SERIOUSLY think about changing my vote.

[MJKooLio]

So there wont be any tax benefits from when? That's why I bought a new car, as it's my work car! I work for my self btw, so..... I've been claiming on it... anyone link me to a easy to understand article of what Krudd is talking about? Vote... or not to vote...

[kaanage]

You'll be fine. It nails the people who salary sacrifice for a car that they allegedly use for work 80% of the mileage (but in reality, probably use it for personal reasons 80%).

http://www.vwwatercooled.com/forums/f40/changes-afoot-novated-leases-87936.html

[tigger73]

I think the problem for the OP is that they got "sold" a finance package which really does not suit the amount of driving they do and the resale of the car is never going to match the payout figure for the car.

Finance guys can do some "magic" with the numbers to get you into a car but it really doesn't help you at the other end when you need/want to move on. My rule of thumb is to never take the car for an "effective" term more than 5 years. By having 5 years plus a balloon you're effectively taking the loan over 7 years which almost always ends in tears (unless you're planning to keep the vehicle that long).

You'll either need to stump up with a wad of cash or roll the problem over into a new car (which only tends to compound things). So the only thing you can do now is to start saving so that you can meet the short-fall when you come to change over. Unless the finance company can take higher payments but if it's on a chattle mortgagte I'm guessing that they won't give you that flexibility.

[brad]

You'll be fine. It nails the people who salary sacrifice for a car that they allegedly use for work 80% of the mileage (but in reality, probably use it for personal reasons 80%).
http://www.vwwatercooled.com/forums/...ses-87936.html

Indeed.

It's removing a benefit that really shouldn't be there (I've taken advantage of it myself).

If you legitimately use your car for business & keep a log book for 12 weeks then it won't be an issue.

I would question why anyone would take out a novated lease for a business vehicle though - I would have thought there were better ways to finance than this.

[amazeer]

.nowhere in my novated lease agreement does it mention percentage business use/private use. I use mine 100% private. The reasons you lease is to pay for the finance, fuel, servicing, insurance in pre tax dollars, lowering your taxable income and pay less tax. It also spreads the load of yearly costs of rego and insurance. I get cheaper fuel without having to carry around woolworths and coles dockets. It forces me to put a little away each month so I'm not broke in rego month. I pay a lease fee and fbt to offset part of that. So yes it is definitely a tax dodge but a legal one.

Its interesting (or not) that the 3 year plan to bring the fbt rate to 20% for all kms travelled only got to year 1 before they have changed it again.

I wouldnt have thought that a business could get a novated lease as a business doesnt have a salary to sacrifice?

I dont think I am saving any grand amounts of money over buying and financing it normally. Only a couple of thousand. We'll see if the changes make law and how long they stay. If its not lucrative enough when I'm due for my new car I'll just buy it post tax. Spread over 3 years I wont even notice it. It will be a pain in the arse for lease companies having to maintain different rules for different aged leases.

[brad]

Amazeer
Your lease doco will say how FBT will be calculated & refer to the Statutory method. The Statutory method then introduces the bus/priv split. This is an assumption of use & you don't have to abide by it, hence you can have 100% private use with no penalty.

I did the sums for a mate about 2 days before the rule changes. He wants an $18k vehicle over 4 years. He's on 37c tax rate & does 20,000km/pa. The difference between Novated Lease & 8% car loan was $15/week in favour of the novated lease without taking into account tax advantages.

It isn't a dodge if it's legal and there's nothing wrong with people taking advantage of legal ways to minimise their tax. Unfortunately, what happens is that when lots of people jump on the bandwagon the Govt (both parties) suddenly sees all the lost revenue & moves the goal posts. Look at superannuation & the constant changes, solar bonus schemes, tax rates, child care subsidies, private health insurance subsidies, etc. You can't bank on anything being constant or permanent except that you will eventually get done over by some whim from a politician.

[gavs]

Re-sale Value on 6R Polo GTI Discussion

Enough talk of tax people, it's not really on topic whatsoever. Please move this kind of chat to the general section yeah?

[MJKooLio]

Re-sale Value on 6R Polo GTI Discussion

Whaddya reckon our Polos be worth then? At 120,000kms...

[brad]

Whaddya reckon our Polos be worth then? At 120,000kms...

About 1/3 of what you paid for it.

[Finance_Analyst]

Re-sale Value on 6R Polo GTI Discussion

About 1/3 of what you paid for it.

That is if you are lucky - age and kms kill resale values. I am seeing mk5 Gtis with that mileage slipping into the early to mid teens and they are not even selling

[brad]

That is if you are lucky - age and kms kill resale values. I am seeing mk5 Gtis with that mileage slipping into the early to mid teens and they are not even selling

I just pulled a number out of my date to shut him up.

As we both know, it's worth what somebody is willing to pay on the day & there's a whole lot more to vehicle value than just age/km. Condition, service history & even geography come into it. Go to Canowindra & the car dealer there wants stupid money for his cars - about twice as much as nearby Orange

[Finance_Analyst]

Re-sale Value on 6R Polo GTI Discussion

As we all know VW resale has been hammered so those hoping it returns to normal may be waiting till the next time another recall happens to another brand the size of VW so the public forget

[MJKooLio]

Re-sale Value on 6R Polo GTI Discussion

Thanks brad