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View Poll Results: How do you purchase your vehicle
Upright (full amount payment from savings) 20 42.55%
Finance with dealer 19 40.43%
Loan (bank, family) 8 17.02%
Voters: 47. You may not vote on this poll

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      02-03-2013, 12:43 AM   #1
Bruno28
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Quick buying question poll

How do most you guys purchase their vehicle, just an interest to know.
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      02-03-2013, 03:42 AM   #2
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CHP for me as I tend to flip every 2 to 2.5 years, and car is a tax deduction
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      02-03-2013, 03:50 AM   #3
VGR00
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CHP for me as well for the same reason as scoobs
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      02-03-2013, 03:54 AM   #4
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Business car via loan of some sort, personal weekender from the pocket.
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      02-03-2013, 04:14 AM   #5
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CHP, flip as often as I can, sometimes
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      02-03-2013, 04:19 AM   #6
sparoz
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Although some might not agree with me, I much prefer to use my money to pay for a car upfront on other investments. Cars has always been an expense to me and it can stay that way until my investments options yield less than interest I need to pay on the cars. My accountant seems to like Chattel finance.

BMW rates and terms are generally very good, and you can always negotiate. Principal and interests are paid unlike recently found out one of my staff signed some stupid 13.1% interest paying interest first type loan arrangement with Esander, with the full interest due if contract is broken with a 7 year term. BMW rarely charge their break cost of $500 and it is proportional to terms left.

This is just my opinion .
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      02-03-2013, 05:20 AM   #7
Bruno28
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sorry for being uninformed, but what is "CHP"?
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      02-03-2013, 05:28 AM   #8
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Quote:
Originally Posted by Bruno28
sorry for being uninformed, but what is "CHP"?
Corporate Hire Purchase.
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      02-03-2013, 05:32 AM   #9
Convert
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I'm with sparoz on this one. I think it should be "Outright", not "Upright". I think we all buy ours upright, unless there are some that buy theirs lying/upside down?
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      02-03-2013, 05:34 AM   #10
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Chattel mortgage. Business write for me
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      02-03-2013, 05:41 AM   #11
Bruno28
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Quote:
Originally Posted by Convert View Post
I'm with sparoz on this one. I think it should be "Outright", not "Upright". I think we all buy ours upright, unless there are some that buy theirs lying/upside down?
hahah, true! I was trying to find the right word, english is my second language! I cant change though
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      02-03-2013, 05:42 AM   #12
Bruno28
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Quote:
Originally Posted by Meijo View Post
Corporate Hire Purchase.
Oh, ok, thats lucky!
i guess it helps a lot.
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      02-03-2013, 06:01 AM   #13
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^ Commercial Hire Purchase has some tax advantages if you are fortunate enough to be in a position to claim a percentage of the use of your car as a tax deduction. Especially handy if you turn your car over frequently - ie less than 3 years.

All to do with the claiming of depreciation ( up to LCT ), and of course interest and costs of running the vehicle.
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      02-03-2013, 06:04 AM   #14
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Quote:
Originally Posted by Bruno28 View Post
Oh, ok, thats lucky!
i guess it helps a lot.
I think you get confused a bit here - CHP is also known is Commercial Hire Purchase (same thing as corporate hire purchase depends on who they are marketing to) - it has nothing to do with corporate. Basically it is an arrangement were the ownership stays with the financer until all the payments (plus the balloon) has been made and ownership will be transferred to you. Someone can correct me if I am wrong, but if the purchase price of the car is less than the LCT threshold, then they are treated as a lease - ie the who repayment amount is deductible.

For us who tends to buy cars over the LCT threshold, the point of CHP is a bit redundant as any lease arrangement over LCT is treated as a loan, and hence we tend to take out a chattel mortgage where it is just like a regular loan, but it is guaranteed by the chattel (which is the car). The advantage is that you take ownership of the car straight away - which specifically in the GFC handouts, that's the only way we can do it to claim the extra write-off.

Usually the requirement for CHP is a declaration that it is for majority business use and you don't have to be a corporate or a business to access the product. I believe there is some change or tightening of law that the lender needed to satisfied that the car is going to be for business use if you are buying in your own name. I think there were some issues with some consumers who was offered the products and ended up learning the hard way that they are no longer protected by the consumer law, as CHP and Chattel Mortgage are both Commercial products.
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      02-03-2013, 06:18 AM   #15
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Hi mate, although it can be a little more complex, a novated lease can maximise your tax benefits. You'll need an employer that offers it though.
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      02-03-2013, 03:06 PM   #16
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Quote:
Originally Posted by sparoz
Quote:
Originally Posted by Bruno28 View Post
Oh, ok, thats lucky!
i guess it helps a lot.
I think you get confused a bit here - CHP is also known is Commercial Hire Purchase (same thing as corporate hire purchase depends on who they are marketing to) - it has nothing to do with corporate. Basically it is an arrangement were the ownership stays with the financer until all the payments (plus the balloon) has been made and ownership will be transferred to you. Someone can correct me if I am wrong, but if the purchase price of the car is less than the LCT threshold, then they are treated as a lease - ie the who repayment amount is deductible.

For us who tends to buy cars over the LCT threshold, the point of CHP is a bit redundant as any lease arrangement over LCT is treated as a loan, and hence we tend to take out a chattel mortgage where it is just like a regular loan, but it is guaranteed by the chattel (which is the car). The advantage is that you take ownership of the car straight away - which specifically in the GFC handouts, that's the only way we can do it to claim the extra write-off.

Usually the requirement for CHP is a declaration that it is for majority business use and you don't have to be a corporate or a business to access the product. I believe there is some change or tightening of law that the lender needed to satisfied that the car is going to be for business use if you are buying in your own name. I think there were some issues with some consumers who was offered the products and ended up learning the hard way that they are no longer protected by the consumer law, as CHP and Chattel Mortgage are both Commercial products.
I think your over thinking it. The only significant difference is

Chp - GST up front deduction
Lease monthly GST deduction
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      02-03-2013, 06:51 PM   #17
sparoz
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Quote:
Originally Posted by pavo335 View Post
I think your over thinking it. The only significant difference is

Chp - GST up front deduction
Lease monthly GST deduction
I am not qualify to advise on tax and I just do whatever my accountant says. Anyway, I was comparing chattel mortgage and CHP and not lease. However, thanks for letting us know the difference with CHP and lease.
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      02-03-2013, 07:14 PM   #18
travisaus
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Pay upfront - don't have any finance on my cars.
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      02-03-2013, 07:45 PM   #19
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Quote:
Originally Posted by pavo335 View Post
I think your over thinking it. The only significant difference is

Chp - GST up front deduction
Lease monthly GST deduction
+1

There is a nice table comparison on http://www.natloans.com.au/compariso...-products.html

The pages is slightly hard to read but the table is formatted correctly when you print it
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      02-03-2013, 07:56 PM   #20
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One big payment.
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      02-03-2013, 09:05 PM   #21
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imo loans for appreciating assets only.
upfront for my cars.
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      02-03-2013, 10:11 PM   #22
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Quote:
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One big payment.
Works if you're a Sultan or Sheik.
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