Lease My Own Car - Is It Possible?

[ramonddam]

Hi all,

Was considering selling my T and leasing something, for tax reasons, than thought - is it possible to sell my car to a finance company and lease it back and pay it off before tax?

I owe a little on it and would be much better off this way. It is a jano5 build, so I could hand it back Jan09, so it is no more than 5 years old when finished.

Interested to hear if this is possible?

I know my company does leasing, etc and then I wouldn't have to worry about finding a car I like/want and selling it later on.

Cheers.

[seventytwo]

I think it can be done, but I would depend on how much you owed on it on whether it would be financial benefit to you.

My first stop would be the accountant to work out the sums

[utemad]

you can lease a car you already have provided you payout or get the lease company to payout the existing debt.. they arent interested if the vehicle is more than 5 years old usually and wouldn't be interested if the term were only 12 months.. you realise you can depreciate it anyway up to 22.5% I think a year if its for business use and you can claim the interest you pay on existing finance.. so where is the lease or should I say commercial HP benefit for you..??

not an accountant so if there is one out there feel free to correct me

Re read it ... What are you aims for doing this and when you say your company are you I gather just a worker and not the owner.. Are you after novated lease or do you have a vehicle entitlement through the company? way too many variables I think discuss with your accountant

cheers utemad

Edited 22/06/08 01:02 PM by Dagabond

[markxr6t]

Yes - its certainly possible as I've done it packaged through MacMillan Shakespeare and financed through CBFC.

Only potential disadvantage is that the financed amount is minus GST when purchasing through a dealer, but if you're registered for GST and you can provide the financier with a tax invoice this will be just as good.

Almost anything is possible with novated leasing if your employer allows you to make some of your own choices and decisions. Last year I got a 1 year lease with a 55% residual through Capital Finance(yes it was ATO compliant) and I know 2 guys who novated leased 1970s classic sports cars (TR4 and a 911), both through Macquarie Leasing. I guess the financier knows that residual won't be an issue!

[ramonddam]

Thanks for all the info. First stop will be the accountant to do the sums.

Will see if it works out and let you know.

Cheers

[utemad]

Finance(yes it was ATO compliant) and I know 2 guys who novated leased 1970s classic sports cars (TR4 and a 911), both through Macquarie Leasing. I guess the financier knows that residual won't be an issue!

Funny my old man went from 911 to TR5 ... dont think most would know what a tr4 or 5 looked like these days

cheers utemad

[ramonddam]

Update.

After speaking to all the 'right' people looks like the lease is the way to go.

Works well for me, tax wise, cost, etc.

Basically, benefits are:

- pre tax fuel, rego, servicing, etc

- after tax contribution to find balance with FBT

- free up capital in car that I can use elsewhere.

- no hassles of selling the car, in a couple of years

As always depends on situation but if you are thinking about it, might be wirth investigating. My other main reason is that I will be heading os in a couple of years and don't want the hassle of selling, etc later on.

Cheers & thanks again for the advice.

[hafadude]

Just a couple more points to think about mate.

1. If you sell the car to the financier, you can be up for capital gains tax if the selling price is in excess of it's value

2. At the end of a lease, yes, you can hand it back to the financier but there may be a clause that says you have to make up any shortfall when the financier sells it on

Maybe just check with your accountant again on these. Good luck with it!