Self Employed - Vehicle Buying & Tax Related

[PTILoveYou]

Hey guys

I'm thinking of buying a new car under my self employed business.

The tax side of things I'm familiar with, ie 30% x 28/33% x 3 + 15% would be the total discount over 3 years off the original purchase price.

But how much to spend is the most efficient?? Say my business generates $100k + gst per year?

I have been looking all sorts of price brackets and it's just too many choices haha!

Any business owners/accountants happy to give me some advice please?

I'm currently looking at 2012-13 Audi Q5 or BMW X3 or Lexus RX450h sort of cars.

Thanks!

Gary


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Nvm, RH450h it is!

[Perry]

It has been suggested that - if you are a DIY PM - some tenants may get a wrong impression if you turn up in a BMW, when it's time to do an inspection.

[Nick G]

Yet for a property coach a Lada might not cut it

[Don't believe the Hype]

Nick - are you suggesting style over substance in the coaching game?

[Anthonyacat]

It's a sad fact that it's often more important to look successful than it is to be successful.

But just because it's sad, doesn't stop it being true.

Better to be both, of course.

[PTILoveYou]

I'm driving a 2001 Honda Civic atm lol.

The really sad fact is that this civic is worth more than my other 2003 Honda Inspire on the same mileage...

[Nick G]

Nick - are you suggesting style over substance in the coaching game?

[ivanp]

LOL
to be fair with Lada, you should start from 1970

and go all the way to

[Wayne]

Have you tried your own accountant Gary?

[PTILoveYou]

Have you tried your own accountant Gary?

I have checked with my accountant, and other business friends as well.

They all preach driving the new cars, often expensive ones.

But once I calculated the cost, I end up still paying a lot for new cars.

So hence I'm still deciding...

PS: Found out that Rx450h hybrid batteries only last 10 years... and $8k USD to replace them... I think I will go for a recent 2nd hand Q3/5...

[Nick G]

You could keep your current car?

[PTILoveYou]

You could keep your current car?

Yeah I'm driving the inspire until I have this all figured out :-)

[Anthonyacat]

I have checked with my accountant, and other business friends as well.

They all preach driving the new cars, often expensive ones.

But once I calculated the cost, I end up still paying a lot for new cars.

As with any business expense, you still end up paying at least two thirds of the cost. Tax advantages are great, but it's a flat percentage discount; if you spend less, it'll cost you less. If you spend more, it'll cost you more.

People preach driving new and expensive cars because that's what the majority of society wants to do - having it tax deductible just makes it cheaper to do what people want to do anyway. I've personally never really seen the point.

You need to decide what features and design your car needs to achieve in terms of image to outsiders, and what features and design your car needs to make you happy. You eliminate all cars that fail either of those tests, and then choose the car with the best cost-to-prettyness ratio among the remainder.