Salary Sacrifice a Car or Buy Outright?

• 

  altomic on 08/12/2016 - 19:44

  +6

  1. consider whether you really need a new car.
  • 

    [Deactivated] on 08/12/2016 - 20:07

    -6

    What kind of weirdo doesn't own a car?

    • 

      altomic on 08/12/2016 - 20:23

      +1

      I mean a near new or used car.

      • 

        [Deactivated] on 08/12/2016 - 23:53

        If everyone had your attitude, there would be no second hand cars for poor people. Think about the poor people.

      • 

        altomic on 09/12/2016 - 00:06

        +1

        @thorton82: I think about them……….and I feel better about my own meagre position in life

    • 

      ronnknee on 08/12/2016 - 22:57

      Not everyone can afford a car.

      • 

        [Deactivated] on 08/12/2016 - 23:55

        -8

        if you can't afford a car and you aren't in full time study, your poor life decisions dictate that you will forever be known as a bus (profanity).

• 

  Diji1 on 08/12/2016 - 19:55

  +4

  Buy a modern second hand car in excellent condition.

  • 

    fault on 09/12/2016 - 00:00

    +1

    This.

    I foolishly bought a new car a few years back. Looking back, the depreciation really does hurt.

• 

  blamesociety on 08/12/2016 - 19:59

  +1

  I had the exact same options. It's been a few years since I did the sums, but in 2013 when I bought my car, my $42K car over 5 years will cost about the same through either of the two options due to GST free fuel, tyres, servicing, etc, plus a good reduction in taxable income. My salary is in the next tax bracket though, so for you it might work out better using the equity in your home. If you choose salary sacrifice, make sure you have a plan for the residual payment at the end (keeping in mind the predicted value of your car at the end of the lease period). Do all the sums in a spreadsheet for a definitive answer.

• 

  sloshie on 08/12/2016 - 20:38

  +1

  Also ensure that if you use cash sitting in the offset/redraw to fund the car, that you increase your mortgage payments/amount going into offset so that you pay back the amount spent on the car over the same period. While home loan interest rates are lower than financing, it doesn't look so good if you stretch that over the entire length of the homeloan.

• 

  Oofy Doofy on 08/12/2016 - 22:32

  Spend no more than 40% or less of your annual income. Buy a car that's 4 years old. Keep for 4 years and then sell. Buy another, rinse and repeat.

• 

  Geewhizz on 09/12/2016 - 08:57

  When we started having problems with our older car a few years ago we did the sums and a leased car was going to leave us $30 a week more out of pocket than we were at the time with running costs alone on that one. The difference being that instead of just doing the 35km return journey into work 5 days a week, we now had a 40 000km allowance which it subsequently turned out we needed, and would have struggled with the fuel costs for the trips we ended up having to make.

  It was by far the cheaper option for us than to go and purchase another vehicle and have running costs on top.