Here are some jargon surrounding the purchase of a new motor vehicle for your business or personal use :
Car Loan :
• A loan secured by the vehicle and repaid in installments, with interest, over a period of time.
• Personal loans for consumers and commercial loans for business or ABN holders.
Demonstrator Model :
• A car used by the dealership for test drives, staff cars, or display cars. They can be cheaper than brand-new versions of the same model.
Depreciation :
• Refers to a tax deduction for the decline in value of an asset
Dutiable Value :
• Vehicle’s total purchase price including GST and luxury car tax or market value at registration
Luxury Car Tax (LCT)
• A tax on cars with a value above the LCT threshold. The LCT is imposed at 33% on the amount above the LCT car threshold. Refer to the ATO website for full details of the LCT.
On Road Costs :
• Mandatory costs added to the manufacturer’s recommended list price.
• Includes dealer delivery charges, registration, and stamp duty.
Run Out Model :
• The car is at the end of its life cycle, with new models on the way.
• Tends to be discounted to make way for the new models.
Factory Bonus :
• This is the financial benefit provided to the dealership by the manufacturer to help move stock.
• Typically passed on to the purchaser in the form of discounts or cash-back offers.

The Fringe Benefits Tax (FBT) on electric vehicles is expected to change, as outlined in the recent Federal Budget, effective 1st April 2027.

For further details, contact your Financial Planner and Accountant.

 

Tags: ,