Finance Dilemma's

[Guest Wilbur]

I am close to ordering the new Turbo Ute. I have had a drive in a mates Cousin's car and was Blown Away!

I have a new job offer, and the new Boss said I can get a car allowance, but is it better to finance it myself and put the car allowance on the Finance payments, or to take the car allowance as a payrise?

The Boss doesn't yet want his company to buy a new car, hence the car allowance to me.

Anyone got some advice??

Cheers

[CJF077]

I am close to ordering the new Turbo Ute. I have had a drive in a mates Cousin's car and was Blown Away!

I have a new job offer, and the new Boss said I can get a car allowance, but is it better to finance it myself and put the car allowance on the Finance payments, or to take the car allowance as a payrise?

The Boss doesn't yet want his company to buy a new car, hence the car allowance to me.

Anyone got some advice??

Cheers

Hi Wilbur,

I would use the car allowance to pay the finance on the new car personally. The car allowance is put in place because they are not providing you with a new vehicle. I suppose it boils down to how much car allowance you are going to get, and will this cover the cost of the new Turbo Ute. If you are going to have to make the rest up yourself are you then willing to do that.

[Dagabond]

Wilbur

If you do a lot of klm's per year you might be better off if you dont take it as a pay rise as you wont benifit from having the allowance taken out of your wages pre tax therefore dropping your taxable income.

This is dependant on a few thing's but.

For what it's worth get in contact with a financial advisor and have them look at your situation they'll be able to give you a lot better idea of where you stand.

[Mondie]

Wilbur are you asking whether you are better off getting the car allowance as taxable income added onto your pay, or kept seperate and called a car allowance and shown as such on your group certificate each year?

Either way makes no difference to the tax benefits you are entitled to, in either case you have to prove the business use. Just because its called car allowance on your group certifcate doesnt legitimise your claims. If you call it a car allowance but have no business use deductions then the car allowance will be taxable in exactly the same way as if it was added onto your pay and not deemed car allowance.

If you are talking about leasing then that's a different thing again.

l hope that makes sense

[Guest Wilbur]

Thanks Mondie,

The type of job I will be doing is consultancy work where I have to be in Ballarat on Mon, then Adelaide by Thurs, and back in Melb on Fri etc. So sure, the car is primarily for work.

My Boss knows I need a vehicle, and says his company is happy to spend a certain amount of money each month on leasing a car.

But since it is going to be primarily my car, he would be happy if I chose the car, and he pays me the money he would have spent leasing a car as a car allowance. If the car I were to buy would cost more (than the allowance), then I could make up the difference.

His company pays for the petrol etc when I am travelling between jobs.

Now I am confused

[Mondie]

Dont be confused, that's great if your boss is willing to set it up that way.

l would take the car allowance and buy whatever l wanted. ( errmm l wonder what that would be )

You have legitimate business use so just need to run a log book for 12 weeks to establish the percentage of business use. For example if it came out to be 70% business use then 70% of your depreciation, servicng, rego, insurance, petrol, tyres etc etc would be tax deductible.

If you didnt have any business use then novated leasing is much better because that opens up tax benefits to you that you cant get without business use. Since you have, taking the car allowance means its your car, your choice.