4 Reasons Why You Should Lease Your Car
Apart from getting a straight loan on the purchase price, car leasing is the most common way for people to finance either a new or used car.
Obviously, it is not a suitable car finance option for every individual - but in some situations leasing can save thousands of dollars, as well as bucketloads of time and effort.
Today we look at four reasons why you should use car leasing as your next form of Sydney, Melbourne or Adelaide Car Finance.
1.
You will only be keeping the vehicle for a few years Leasing is the preferred option when you have a high car turnover.
If you'll only be keeping a vehicle for a few years, leasing shields you from the high depreciation in the first year of ownership, as well as greatly simplifying the process of getting rid of the old car - you simply give it back to the leasing company! 2.
Your lease deal can take care of insurance, registration and running costs Some lease deals take care of maintenance and running costs as well as insurance and registration - however all lease terms differ.
Sometimes you can get quite a good deal by effectively bundling the running costs, the insurance and the cost of 'renting' the car.
3.
Because your tax position is such that a lease would be tax deductible For some people, any amount paid on their car lease is tax deductible.
Either a cheap car loan broker, or your accountant, can advise you if this will be the case.
Depending on your tax bracket, you could be effectively paying only 60% of the running cost and purchase cost of the car.
4.
The financier can claim back GST on the purchase price This effectively reduces your monthly payments, and makes leasing a better deal than buying - when you would be subject to paying the full amount of GST.
In this instance you will not need to pay GST nor claim back the GST as this is all done by the financier.
In some circumstances you may have an even greater financial incentive to lease your car rather than purchase it outright with a loan; that is when you have access to salary packaging.
Car leases that are paid out of pre-tax salary (when this is approved by your employer) are called novated leases, and while they are subject to FBT, can still be a significant saving.
Obviously, it is not a suitable car finance option for every individual - but in some situations leasing can save thousands of dollars, as well as bucketloads of time and effort.
Today we look at four reasons why you should use car leasing as your next form of Sydney, Melbourne or Adelaide Car Finance.
1.
You will only be keeping the vehicle for a few years Leasing is the preferred option when you have a high car turnover.
If you'll only be keeping a vehicle for a few years, leasing shields you from the high depreciation in the first year of ownership, as well as greatly simplifying the process of getting rid of the old car - you simply give it back to the leasing company! 2.
Your lease deal can take care of insurance, registration and running costs Some lease deals take care of maintenance and running costs as well as insurance and registration - however all lease terms differ.
Sometimes you can get quite a good deal by effectively bundling the running costs, the insurance and the cost of 'renting' the car.
3.
Because your tax position is such that a lease would be tax deductible For some people, any amount paid on their car lease is tax deductible.
Either a cheap car loan broker, or your accountant, can advise you if this will be the case.
Depending on your tax bracket, you could be effectively paying only 60% of the running cost and purchase cost of the car.
4.
The financier can claim back GST on the purchase price This effectively reduces your monthly payments, and makes leasing a better deal than buying - when you would be subject to paying the full amount of GST.
In this instance you will not need to pay GST nor claim back the GST as this is all done by the financier.
In some circumstances you may have an even greater financial incentive to lease your car rather than purchase it outright with a loan; that is when you have access to salary packaging.
Car leases that are paid out of pre-tax salary (when this is approved by your employer) are called novated leases, and while they are subject to FBT, can still be a significant saving.
