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Vehicle Finance – The Options

Are you looking into purchasing a new vehicle for your business and are confused about the different finance options out there?

Its ok! Most people are. That’s why we have made a small summary of the two most common finance types and what they mean for you! Although there are many options these are the two most common finance types we see in your tax returns.

Hire Purchase Lease

In this finance arrangement a finance company agrees to purchase the vehicle on behalf of the customer and then lease it back to them over a period of time. At the end of the lease the customer then pays a residual and takes full ownership of the vehicle.

The advantages of this type of lease are that there are fixed monthly repayments and a fixed interest rate, your costs are known in advance, the finance is secured against the vehicle meaning you may have lower interest rates, a tax deduction is available on the vehicle depreciation and if you are registered for GST you can claim GST on the purchase price of the vehicle and on the term charges over the period of the loan.

Chattel Mortgage

Under this arrangement the financier will advance the customer the money to purchase the vehicle and then will take a mortgage over the vehicle as security for the loan until the loan has been paid off.

Many of the benefits of this method are similar to that of a Hire Purchase Lease however there are some differences. The vehicle is owned by the customer from the time of purchase rather than at the end of the lease period and if you are registered for GST you can claim the GST on the purchase price of the vehicle only and not on the term charges each month. However one advantage is that a business can claim this GST on the purchase price up front in their next BAS rather than over the term of the lease.

For more information on the different options for you please feel free to contact our office and we will be glad to lend our expertise!

The Plug

Did you know , not only can CATS help you with the tax implications of your finance choice, you can also contact CATS to arrange finance for your business vehicle? Through Macquarie Leasing CATS can assist you in making the process easier and ensuring you receive a competitive rate for your next vehicle purchase. For more information please contact our office.

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Interested in working with us? Check out some of our client testimonials below!

Ben Dunstan

Master Building Works Pty Ltd

Having met Warren Garth of CATS Accountants some five years ago, I was pleased to achieve a seamless transition from my retiring accountant to his services to look after my accounting and tax work. He’s got a great team behind him, which is most helpful and friendly. All enquiries are answered quickly and comprehensively. I particularly like the use of the wide screen TV to present my figures.

Thanks Warren – Keep up the good work!

Master Building Works Pty Ltd

Glenn Kirkwood

BNI Franchise Owner

The team at CATS have done it again!  Other than your usual friendly and attentive service you now have questionnaires that I can use to prepare my end of financial year information at tax time. Makes things so much easier for me now that I know exactly what you need.

Thanks CATS – you really will get my business purrring!

Ph: 0425 433 603

Daniel Kebriti

Pharmacist

CATS Accountants assist me with my accounting and taxation matters for both my business and personal affairs. I strongly recommend them to anyone who is seeking professional advice at an elite level. Warren and his friendly, supportive team always respond promptly to my calls, focus on what my needs are and best of all strive to minimise my tax.

Beverly Bowman

Director - Beautique Beauty Therapy

Warren, Kerry and the Team at CATS Accountants have been taking care of us for our bookkeeping, accounting and taxation needs for 9 years now.   Thanks to their exceptional service and the monthly reports we always know where we are at with our business.  We have always been happy with CATS Accountants and their personal approach and would highly recommend them to other businesses.

Beautique Beauty Therapy

Tony Bourke

Director - AIIB Insurance Brokers

To Warren,

I would like to let you know that we are absolutely happy with the work that has been done for us. The Team are great to work with and it is a pleasure to have CATS as our Accountants. I wouldn’t hesitate to recommend CATS to our business associates.

Dr Kenneth Zimmerman

Lecturer in Marine Biology, University of Newcastle

I would like to thank Warren and the Team at CATS Accountants for providing a friendly atmosphere and for being so helpful with my accounts.

I appreciate how you assist me in keeping up to date with my tax and accounting information, and I am grateful for the excellent service that you provide.

 

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