The decision on how to fund and structure the purchase of any new Audi can be confusing, obtaining the right advice and understanding what is available can lead however to financial savings.
While all individual decisions should be made taking personal circumstances into account and under advice from a financial professional, there are some basic rules which should make the process a little easier during any purchase.
One of the methods of purchasing a new Audi which is gaining in popularity is the use of salary packaging and a novated lease.
The purchasers may need to consider whether to use a novated lease or a car allowance.
There is a basic rule of thumb and it is dependent upon the vehicles use for business purposes. If the vehicle is used extensively for business purposes a car allowance or claiming the car as a tax deduction may be best, if there is no or minimal business use, a novated lease may be the most effective. It is important to note that driving to and from work is not considered business purposes by the Australian Tax Office.
For most Australian employees who do not use their vehicles for business purposes a novated lease is a very effective means to purchase the vehicle of their choice and take advantage of some handy tax concessions.
Novated leases currently work very effectively at reducing the total tax payable by Australian employees.
The reason for this is as a result of motor vehicles concessional treatment under current Fringe Benefits Tax (FBT) legislation.
The current legislation dictates that the FBT is calculated upon the total amount of kilometers travelled by the vehicle in an FBT year. Interestingly, the further the vehicle travels potentially the less FBT is incurred.
A correctly structured novated lease should see most Australian employees reduce their income tax, pay a proportion of their running costs in pre tax dollars and negate any FBT liability.
Robert wishes to purchase a $50,000 A4 1.8t and is on a gross annual income of $85,000. He is looking at financing the A4 over 48 months and travels approximately 12,000 kilometers but no more than 15,000 kilometers. In this scenario Robert will save approx $1,000 per year compared to any other method of finance.
In order for Robert to take advantage of a novated lease arrangement, he will need an agreement with his employer and his bank or finance company. Most employers and financiers provide the ability to enter novated leases due to the advantages employees can gain through this structure. It is now a very popular finance option for individuals.
Further advice can be obtained through your Audi dealership or fleet management companies.