The conclusion of the fiscal year is linked to reduced prices and incredible offers.

Entrepreneurs are organizing their tax documents while avid shoppers are in a frenzy. Brace yourself for the onslaught of promotions and marketing strategies boasting "unbeatable prices". It's no secret that the end of financial year is the perfect opportunity to purchase a new car!

Currently, it is widely known that the ideal time to purchase a new vehicle is during the months of May and June, which are considered the peak selling period of the year. As evidence, the Australian automotive market.

At the end of the financial year, attractive incentives and longer warranty periods are used to attract buyers. However, is this truly the most beneficial method for securing a good deal? Opting for a novated lease, which is also referred to as salary packaging, can offer similar advantages as buying a new car during the EOFY sales.

The argument over whether to purchase or lease has been ongoing for quite some time. If you are thinking about getting a new car for tax purposes, here are the reasons why a novated car lease could be a feasible alternative:

Advantages of Tax Benefits

Purchasing a new car in June is a financially wise decision in order to take advantage of tax benefits.

Entrepreneurs aiming to manage their tax obligations have an additional motivation to make purchases before the end of the financial year. Cars can be claimed as a tax write-off, which can reduce the overall tax payment and lead to more favourable outcomes when dealing with the tax authorities.

Small businesses can also benefit from significant tax deductions for depreciation. The entire cost of the vehicle may be claimed as a deduction, depending on its price. Additionally, deductions for running costs of the new car can also be made.

Purchasing a vehicle through a novated lease presents considerable tax advantages as well. Leasing a car reduces your taxes on not only the vehicle itself but also its maintenance expenses, making it possible to acquire new wheels at any point in the year. This is a financially beneficial opportunity for workers and entrepreneurs.

Understanding Deductibles

Novated leases can potentially save money for both employees and business owners.

Paying your car instalments with pre-tax money can stretch your budget as it allows you to save more. Additionally, using your pre-tax income to cover car-related costs is advantageous as it reduces your taxable earnings and simplifies your car payments into one manageable installment.

Deductions may be available when leasing a car.

• Cost of Operation: This includes expenses for fuel, repairs, and replacement parts. Additionally, a fuel card will be provided to monitor fuel consumption.
• Insurance and Upkeep: With a novated lease, all costs associated with operating a vehicle, such as insurance, regular servicing, maintenance, and repairs, are covered by your pre-tax income.
• Additional Charges: You can deduct expenses for automatic registration renewal, car detailing, and new tires.

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End of Financial Year Sales

In order to end their financial year on a positive note, car dealers and renowned brands are determined to attract customers with aggressive tactics and meet their important sales goals.

Although these offers may be enticing to potential car buyers, they can lead to impulsive choices. The end of financial year is an opportune moment to take a step back, evaluate different options, and review the offers presented to you. If they do not align with your preferences, you have the option to visit another dealership and potentially receive a similar deal from a competing company.

For certain customers, it may be more advantageous to have access to these opportunities throughout the entire year. End-of-financial-year sales have limited timeframes, but novated leases provide cost-effective benefits throughout all 365 days. By utilizing salary packaging for a vehicle, you can decrease your finance amount, which can be equally valuable.

Deceptive Tactics Used by Car Dealers

In order to make car sales more appealing, dealerships often offer "free" incentives. These tactics are especially heightened during the competitive end of the financial year.

For instance, the inclusion of 'complimentary' add-ons can be deceiving. Although the promise of $500 worth of additional items may seem attractive, it is important to consider if you actually require all of them. These marketing strategies may convince you that you are getting a fantastic bargain, but don't allow yourself to be swayed into buying something that may not align with your needs.

One tactic commonly used by car dealers is to offer incentives such as complimentary insurance coverage, maintenance, or roadside assistance. However, these are often just ploys to lure customers back to the dealership or to generate additional profits. It is highly likely that there are better offers available elsewhere.

Car dealerships may also lure you in with the drive-away cost, but a low initial price does not guarantee low running costs. According to statistics from the Australian Bureau of Statistics, the average Australian drives over 13,716km per year. As such, the ongoing expenses of a car with high running costs far outweigh the initial drive-away cost.

Which Option is Best for You: Buying or Novated Leasing?

If you're trying to decide between purchasing during EOFY sales or opting for a novated lease, you're in the correct spot. Alliance Leasing is available to assist in finding the best solution for your specific circumstances. Contact one of our team members to learn about the advantages of car leasing for you.

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