Audi Finance Purchase or Lease?

Once you have made up your mind to purchase a new vehicle, the next question is often not what car, but how you are going to fund the new vehicle. Purchasing a new vehicle can often lead to having to weigh up whether you want a lease or purchase product, to best suit your lifestyle and circumstance – it’s a common dilemma.

Finance leases and loans are simply two different methods of financing your car (leasing is not renting). One finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks and the best choice will depend on your individual situation. Below is your guide to leasing and purchasing to help you weigh up some of the options.

Reasons you should lease your next vehicle.

Apart from getting a straight loan on the purchase price, car leasing is the most common way for people to finance either a new or used car. Obviously, it is not a suitable car finance option for every individual – but in some situations leasing can save thousands of dollars, as well as loads of time and effort. Here, we look at four reasons why you should consider a finance lease.

1. You will only be keeping the vehicle for a few years.

Leasing is the preferred option when you have a high car turnover. If you plan on only keeping a vehicle for a few years, leasing shields you from the high depreciation in the first year of ownership, as well as greatly simplifying the process of changing over your vehicle – you simply give it back to the leasing company!

2.  Because your tax position is such that a lease would be tax deductible.

For some people, any amount paid on their car lease is tax deductible, and depending on your tax bracket you could be saving money each year. We recommend that you speak to your accountant who can advise you if this is an option for you.

3. The financier can claim back GST on the purchase price.

This effectively reduces your monthly payments, making leasing a better option than a purchase loan, where you would be subject to paying the full amount of GST.

In some circumstances, you may also be eligible for salary packaging, giving you an even greater benefit. Vehicle leases that are paid out of pre-tax salary (when this is approved by your employer) are called Novated Leases, and while they are subject to Fringe Benefits Tax (FBT), there can still be a significant saving.