R36 Wagon- what did you pay?

[DJC]

Exactly!

[Luminary]

Agree...like an appreciating asset (eg. land). At least with depreciating asset like a car the depreciation is tax deductable if you lease/CHP etc...Pay cash and you dont get this benefit. At the end of the day, each to their own based on their circumstances.

This is incorrect.

If you lease you cannot claim depreciation. That is something the lease company does on what effectively is owned by them. Your lease payments on the other hand are claimable in their entirety.

By paying cash, or taking out a chatel mortgage you become the owner and can claim the depreciation on the car as a deduction, and the interest component of your car payments if you take out credit.

The depreciation is not an insignificant deduction. Leasing cuts you off that.

Summary:

Lease: You claim all your lease payments under the LCT limit as deductions.

Chatel Mortgage: You claim interest payments under the LCT and depreciation of the car as deductions.

You have to do the sums for yourself. Also, insurance on a financed car is higher. It also feels better to actually be the owner of the vehicle rather than a 'renter'.

It's a religious battle in the end. I like to own, other's like to lease.

With my Accord Euro, I paid cash outright. $40k.

So what did I get?

No interest payments at all over the 4 years.

I claimed all the depreciation on the car + expenses leading to a deduction of about $9-10k per year. So $4k of money stayed in my pocket each year instead of in the ATO bank account. $16k in my pocket.

Car is now worth about $25k - so I lost $15k in the value of the car. I'm still better off as I didn't have to pay $16k in tax as a result.


If I'd mortgaged at 10% pa would have been interest of about $16k over 4 years. I'd still have paid the principal of the loan so $40k is gone also. And then the car is only worth $25k so a hit of $15k on real depreciation. Tax deductions on depreciation is the same as above. But nett result is that I've paid $16k in interest and got back about $8k due to tax deduction on the interest. So I'm about $8k down.

With lease the situation - $24 000 leased with $16000 residual. $610 monthly payments for 4 years = $29 280 in payments. Save $14k in tax. Car is worth $25k so you have $9k cash if you sold the car privately. You can't claim depriciation. So you've paid out $14k of lease payments after deductions and you have $9k cash at the end. Out of pocket by $5k.

Buy outright: Even

Mortgage: $8k down.

Lease: $5k down.

[V6Passat]

This is incorrect.

If you lease you cannot claim depreciation. That is something the lease company does on what effectively is owned by them. Your lease payments on the other hand are claimable in their entirety.

By paying cash, or taking out a chatel mortgage you become the owner and can claim the depreciation on the car as a deduction, and the interest component of your car payments if you take out credit.

The depreciation is not an insignificant deduction. Leasing cuts you off that.

Summary:

Lease: You claim all your lease payments under the LCT limit as deductions.

Chatel Mortgage: You claim interest payments under the LCT and depreciation of the car as deductions.

You have to do the sums for yourself. Also, insurance on a financed car is higher. It also feels better to actually be the owner of the vehicle rather than a 'renter'.

It's a religious battle in the end. I like to own, other's like to lease.

With my Accord Euro, I paid cash outright. $40k.

So what did I get?

No interest payments at all over the 4 years.

I claimed all the depreciation on the car + expenses leading to a deduction of about $9-10k per year. So $4k of money stayed in my pocket each year instead of in the ATO bank account. $16k in my pocket.

Car is now worth about $25k - so I lost $15k in the value of the car. I'm still better off as I didn't have to pay $16k in tax as a result.


If I'd mortgaged at 10% pa would have been interest of about $16k over 4 years. I'd still have paid the principal of the loan so $40k is gone also. And then the car is only worth $25k so a hit of $15k on real depreciation. Tax deductions on depreciation is the same as above. But nett result is that I've paid $16k in interest and got back about $8k due to tax deduction on the interest. So I'm about $8k down.

With lease the situation - $24 000 leased with $16000 residual. $610 monthly payments for 4 years = $29 280 in payments. Save $14k in tax. Car is worth $25k so you have $9k cash if you sold the car privately. You can't claim depriciation. So you've paid out $14k of lease payments after deductions and you have $9k cash at the end. Out of pocket by $5k.

Buy outright: Even

Mortgage: $8k down.

Lease: $5k down.

and this is why i have an accountant!! I CHP cause less paper work than a lease and personal choice

[V6Passat]

and this is why i have an accountant!! I CHP cause less paper work than a lease and personal choice

oh, in fear of kicking off a discussion on economics, we shouldnt forget about the principle of opportunity cost. Instead of buying a $60/$70k car outright, could i instead use this money to make money and/or reduce the costs of other financial commitments at a great rate than any benefit of buying the car outright? my prefereance as per example is real estate...land content goes up (house goes down).

[Luminary]

oh, in fear of kicking off a discussion on economics, we shouldnt forget about the principle of opportunity cost. Instead of buying a $60/$70k car outright, could i instead use this money to make money and/or reduce the costs of other financial commitments at a great rate than any benefit of buying the car outright? my prefereance as per example is real estate...land content goes up (house goes down).

Well really you have to consider all things.

If you have a mortgage then yes, it's hard to get 5% return on money these days; and being non tax deductible debt the money is best put into that rather than a car.

[apom]

Getting the corporate discount is easy and is worth at least 2K to 4K extra. I simply went and joined one, cost $350 to do so and that got me another $4K off the price with VW!

[ur85q]

Getting the corporate discount is easy and is worth at least 2K to 4K extra. I simply went and joined one, cost $350 to do so and that got me another $4K off the price with VW!

This is something I tried to take advantage of, but couldn't work out what to join to become eligible to take advantage of a corporate/institutional discount. Is there a group/society that anyone can join to get the discount? The dealer wouldn't help identify one (no surprise there), and my own research led me to a bunch of dead ends.

Is there really something out there that anyone can join to get the corporate discount?

[scotty1991]

Went with my dad to look at the R36 yesterday and they offered it to us for $64,000 with the RNS510, but they offered a pretty laughable ammount on trade in for his BMW.

Sedan that is.

[tryingavw]

Went with my dad to look at the R36 yesterday and they offered it to us for $64,000 with the RNS510, but they offered a pretty laughable ammount on trade in for his BMW.Sedan that is.

i had the same experience the vw dealer offered 6 below the merc. was enought to make the c320 do-able.

Also i see private people are trying to sell mb320cdi 1-2 years old about 15k HIGHER than i paid for a new one. I also reckon private sellers seem to be asking higher amounts than dealerships for like cars.

So, i reckon private sellers ASKING prices for luxo's are no guide at all.

Heres an idea, go to a merc dealership and see what they give you on a S500 - that will set the bar as high as it gets!

[Greggles]

Went with my dad to look at the R36 yesterday and they offered it to us for $64,000 with the RNS510, but they offered a pretty laughable ammount on trade in for his BMW.

Sedan that is.

Same - the guy wouldn't even entertain me with a quote on my Australian-Toyota imported GT4 Rallye. His comments suggested less than $8k. I put it on carsales and got mid-$20k (fully maintained and serviced by Neal Bates). Then went and paid $66700 DA for the MY10 R36 sedan with satnav, sunroof, tinting and paint protection With the sale of the GT4 and Audi, corporate discount and shopping around with a pocketful of cash, I was out of pocket less than $20k. Mind you, that was now over 6 weeks ago when there were a few cars still available! Guess I had a bit of luck on my side!