Salary Sacrificing second hand GTS

[BLACK 346]

I am after some advice about Salary Sacrificing a
second hand vehicle. Basically I just want to know
if it is worth it on a second hand car. The car in
question is a 2006 E Series GTS with 63k on the clock.
The price of the car is $54,495.
Looking forward to your replies.
Thanks :)

[HSVREDSLED]

I am after some advice about Salary Sacrificing a
second hand vehicle. Basically I just want to know
if it is worth it on a second hand car. The car in
question is a 2006 E Series GTS with 63k on the clock.
The price of the car is $54,495.
Looking forward to your replies.
Thanks :)

Most leasing mobs have a maximum age of the car at the end of the lease. So depending on the length of your lease may affect this. How many years would you take it over?

[Smitty]

you can sal sac 2nd hand cars..no probs there

but and its a BIG BUT
most car finance mobs I know will NOT lease a 2nd hand car
thats more than 12 months old or done more than 10,000kms

do you have lease finance arranged??

[BLACK 346]

Thanks guys, that is the kind of info I was looking for.
Smitty, no nothing arranged yet, just looking at options :)
Might be better off looking at a new R8 maybe?

[nang3]

we've just been offered novated leasing at our company and basically the car can be any age/value/km's etc AS LONG AS when the lease expires the vehicle is no more than 8 years old.. that might apply in your case depending on the company that manages the leasing - we use Direct Salary Packaging

They even said they will pay me out the Glass's guides valuation for my current privately owned F6 to set up a new lease for it !!

[Carby]

we've just been offered novated leasing at our company and basically the car can be any age/value/km's etc AS LONG AS when the lease expires the vehicle is no more than 8 years old.. that might apply in your case depending on the company that manages the leasing - we use Direct Salary Packaging

They even said they will pay me out the Glass's guides valuation for my current privately owned F6 to set up a new lease for it !!

The leasing company we use has similar conditions to Nangs - second hand cars are ok so long as the car is not more than 7 years old at the end of the lease and has under 200,000km's.

As I tell all our staff the most important aspect about a novated lease is that you travel enough kilometres to avoid high FBT cost. If you do less than 15K a year - forget it, between 15k and 25k is probably acceptable and over 25K is good.

[macca33]

It depends, substantially, upon whom you work for. In my case, basically ANY Australian-built passenger car (incl. utes?) that is up to 6 years old at commencement of lease, with amaximum lease period of 5 years. The company that does the novated lease packages (SGFleet in my case) arranges the finance.

I bought my car from a yard, but they will do private sales and even allow a person to lease their privately owned car, which nang3 alluded to.

cheers

[livewildcard]

I'm onto my third second hand salary sacrificing car. For all 3 the same rules have applied (and have been with two different companies). At end of lease car can't be more than 8 years old.
So if you want a 2 year lease you can look for a car 6 years old etc. Want a 4years lease can only look for car no older than 4 years.

I have always liked it for the fact that I know how much is coming out exactly for fuel, rego, insurance, tyres, maintenance etc as 1 lump sum per fortnight and I dont have to worry about figuring it out or being stuck with large rego bill at 1 time a year.

Also if you play cards right and pick up a bargain etc your payout or balloon figure can be extinguished by selling car properly at the end of the lease.

However like all things it does have some con's like the payout figure if you want to end lease before can be quite substantial etc. So it pays to look at pro's and con's.

[BLACK 346]

Thanks everyone, some great info as usual.
I am with Dept of Defence, so I guess I
have to go with whoever does their Salary
Sacrifice, is that how it works?

[HSVREDSLED]

Dont get scared off going second hand just yet.

Do you homework with the leasing mob.

I think it is the best way to go!!!

[BLACK 346]

Here is the car I am looking at. At first I thought it
seemed like a good price, but after looking on redbook
it is not that cheap

http://www.carsales.com.au/all-cars/results.aspx?N=1216+1246+1247+1252+1282+4294965530 +4294965529+901&keywords=&tsrc=allcarhome&Nne=15

[HSVREDSLED]

Buying from a dealer you have just soaked away a lot of the money you save from buying second hand.

Have a look at a new R8. Save on the GST. See what drivewaway price you can get. Let you lease company haggle, then see if you can beat there price.

[nang3]

when looking at cars to lease, can you subtract 10% from the price since GST is not paid or something?? a guy here was saying something about that but it doesnt sound right??

[VTV691]

oh noe... its auto..:1peek:

[BLACK 346]

oh noe... its auto..:1peek:

Yep, the most appealing thing about it imo. Already got a
300+ rwkw M6 SS and a Manual WRX Wagon. This one
would be staying dead stock as well :)

[SharkBiscuit]

I heard a rumour that the Fringe Benefit rules re salary sacrifice and cars was going to be looked at by thge ATO.

Also, the mob that manage our novated leasing say this :
Any new vehicle can be chosen on this lease option. Second hand vehicles are also available subject to an age of less than 2 years and kilometres less than 50,000 (used vehicles via Novated lease must be sourced from a licenced motor car trader).

Buying only from an LMCT sux a bit.

[1BEAST2NV]

couple of Q's..

How does salary sacrifice work????

can anyone do it / apply for it ???

or do you have to meet a certain standard of requirements?? if so what are they.

cheers

[Sime]

The car is purchased through what is called a novated lease. The lease payments are made by your employer and your wages are reduced by the same amount. You're therefore having the car paid out with pre tax dollars. If you leave employment, you get the car and take over the lease payments.

You'd have to ask your employer whether they would allow you to do it, otherwise anyone can do it. If you've got an accountant, you could also chat with them as to whether it's worth it for your individual circumstances. There are a number of factors that will effect whether it's worth it or not including your current salary, value of the car, kms travelled, who pays for the running costs, who covers the FBT liability, can you claim car expenses personally.

Most employers will pass on the FBT liability to the employee which more often than not, cancels out most of the benefit of doing it. FBT is calculated on kms travelled or the use of a log book. If you travel more than 25,000kms or have a high business use through a log book, then it might be worth doing. FBT can be substantially reduced if you cover the running costs out of your own pocket also.

If you have the flexibilty to shop around for finance, then you won't have a problem financing a 2006 GTS

Every client I have done the calcs for has ended up saying stuff it, it's not worth the hassle for the minimal gain.

[Swordie]

Generally you need to do the kilometers to make novation worth it.

There will be financial simulators on most major leasing companies roughly showing the numbers.

What I object to with leasing is your usually subject to who your employer chooses. If it was like Super and there was freedom of choice it would encourage more competition.

[BOOGER]

Main things I think you need to consider between new or used is:

1. New from a dealer you'll pay no GST and you'll get a fleet discount and possible an additional manufacturers discount. A mate of mine from work just salary sacrificed a brand new A6 SSV with over $1,500 worth of accessories for $44,000 drive away.

2. Second hand from dealer you'll pay no GST but that's it. It will be up to you to negotiate the price.

3. Second hand privately no GST applicable and you negotiate the price again.

So baring all that in mind if the price on the used car is still less than the new one considering there will be no GST to pay, fleet discount and the possibility of a manufacturer discount and you don't mind a car a couple of years old then yes it's a good option.

I myself salary sacrificed an 18 month old 07 A6 SSV christmas last year for $36,000.

[SEMPER FI]

Thanks everyone, some great info as usual.
I am with Dept of Defence, so I guess I
have to go with whoever does their Salary
Sacrifice, is that how it works?

Mate, Defence uses Smart Salary FYI !

[SEMPER FI]

And they do used cars as well...................

[Wonky]

How does GST work on leasing a used car? I know on a new car such leases are GST free on the original purchase price because the GST is built into the payments, but what happens on a used one?

Secondly, was going to say that seems a high price for a 3 year old car with such high mileage on it given people were picking up brand new LS3 GTSs this time last year for not much more, but you've already figured that out now.

[VX2VESS]

Main things I think you need to consider between new or used is:

1. New from a dealer you'll pay no GST and you'll get a fleet discount and possible an additional manufacturers discount. A mate of mine from work just salary sacrificed a brand new A6 SSV with over $1,500 worth of accessories for $44,000 drive away.

2. Second hand from dealer you'll pay no GST but that's it. It will be up to you to negotiate the price.

3. Second hand privately no GST applicable and you negotiate the price again.

So baring all that in mind if the price on the used car is still less than the new one considering there will be no GST to pay, fleet discount and the possibility of a manufacturer discount and you don't mind a car a couple of years old then yes it's a good option.

I myself salary sacrificed an 18 month old 07 A6 SSV christmas last year for $36,000.

they are trying to sell those for more than that now, some are asking low 40's, while new 09 cars are getting runout at the same price doh...

[BLACK 346]

Mate, Defence uses Smart Salary FYI !

Cheers mate :)

[Wonky]

How does GST work on leasing a used car? I know on a new car such leases are GST free on the original purchase price because the GST is built into the payments, but what happens on a used one?

:doh: Just realised BOOGER has answered that question.

[nang3]

Main things I think you need to consider between new or used is:

1. New from a dealer you'll pay no GST and you'll get a fleet discount and possible an additional manufacturers discount. A mate of mine from work just salary sacrificed a brand new A6 SSV with over $1,500 worth of accessories for $44,000 drive away.

2. Second hand from dealer you'll pay no GST but that's it. It will be up to you to negotiate the price.

3. Second hand privately no GST applicable and you negotiate the price again.

So baring all that in mind if the price on the used car is still less than the new one considering there will be no GST to pay, fleet discount and the possibility of a manufacturer discount and you don't mind a car a couple of years old then yes it's a good option.

I myself salary sacrificed an 18 month old 07 A6 SSV christmas last year for $36,000.

so does that mean I can go to the local dealer, haggle as hard as normally would on a brand spanking new car.. then say "oh BTW its going on a lease so please take a further 10% off that price, and now take off the fleet discount please"???

[Wonky]

I thought with novated leases on new cars the leasing company usually negotiates a price, or just presents you with one, usually better than you could ever manage.

[BOOGER]

I thought with novated leases on new cars the leasing company usually negotiates a price, or just presents you with one, usually better than you could ever manage.

On new cars yes, the lease company will have a prefered dealer network (at least mine does - leaseplan). The problem with this is you don't know where your car is going to come from. However there is nothing stopping you from taking the lease companies quote to your local dealer and ask them to beat it. The lease company generally doesn't like you doing it but what they don't know won't hurt them.

[BOOGER]

so does that mean I can go to the local dealer, haggle as hard as normally would on a brand spanking new car.. then say "oh BTW its going on a lease so please take a further 10% off that price, and now take off the fleet discount please"???

Yes you can. As I said to Wonky you can take the lease companies quote to your own dealer or you can get your own quote independently and present that to the lease company. As far as GST goes it is still payable but not by you. Your employer will pay it and claim it back as a tax credit. If you get your own quote you need to tell them to itemise it so it breaks down the price into it's components ie vehicle price, GST cost, options etc. With fleet discount it is often negotiated by the lease company with its dealer network so it may be different one lease company to the next. If you were going for a Holden best to ask for the fleet manager and not deal with the new car salesmen. The best discounts come from the car makers that deal with a lot of fleet sales, so Holden, Ford, Toyota etc.

[Smitty]

I thought with novated leases on new cars the leasing company usually negotiates a price, or just presents you with one, usually better than you could ever manage.

...depends

if yr employer uses a remuneration or salary package company
they will do the negotiations for you (and charge you for it)

If you do as we do, we internally manage all of our salary packaging
we tell the employe...you go find the car, you go find a finance co
(bank or car finance mob...we dont care) BUT here are the rules ....
which covers the term we will allow novation, rules re luxury cars etc
etc blah blah

no like rules...stiff!
we will not allow novated leases and the relevant packaging unless you agree

AND
we tell all emplyees offered packaging...go talk to a tax accountant
to make sure it fits your tax arrangements and lifestyle

[1BEAST2NV]

So some one like my self, who's self employed/sub contractor, and am my own boss, have had my business running for not quite 2 yrs now, and have my own team of boys, could possibly get this salary sacrifice???

maybe something to look into??

I currently have a vx clubby but have my heart set on a VE clubby now..

I was planning on trying to get into a VE mid-end of next year.

[Devil CV8]

I have a novated lease on my VE SS ute. Basically the price at the time couldn't be beaten by the lease company so it was my price that won out.
My employer requires staff taking out a novated lease for the first time to get financial advice, but then it's open season. The employer also has rules in place that no more than 50% salary can be sacrificed and that you can not benefit from any government benefits by reducing your taxable salary ie FTB A or B, child support etc.

[Smitty]

Yes you can. As I said to Wonky you can take the lease companies quote to your own dealer or you can get your own quote independently and present that to the lease company. As far as GST goes it is still payable but not by you. Your employer will pay it and claim it back as a tax credit. If you get your own quote you need to tell them to itemise it so it breaks down the price into it's components ie vehicle price, GST cost, options etc. .........

Do NOT allow your employer to buy the car and claim the GST..all bets are OFF as far as the Tax Office are concerned

This will be seen as a Loan Benefit under the FBT rules
and your employer will have to account for that as such
Also
your novation is ineffective as far as the ATO is concerned
and you/your employer will get an FBT bill
that wipes out the concessions that go to those who do an
effective novation of their finance agreement for their car

...you or your employer will get slugged with a hefty bill
and in some circumstances there will be an imputed interest factor
that will bump this cost up

to have effective salary packaging that includes a car
on a novated lease..YOU the employee
must own the car and have a finance liability (HP or lease) that you transfer
(novate in legalese) to your employer as a condition of your employment .
If you dont the whole is treated as a sham by the ATO..and as I said all bets are off

and I say that having been thru an FBT/Salary packaging audit by the ATO

be careful ....