FBT: Second-Hand Cars
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Is a new Japanese car more tax efficient than a three-year-old European car? Learn why second-hand cars might be more FBT efficient under the statutory formula method.
Date published: 21 April 2022
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TRANSCRIPT
What About Second-Hand Cars? Are There More FBT Savings?
The second-hand car might be relatively more tax efficient, so rather than buying a new Japanese car, you might prefer to buy a three year old European car. The capital cost might actually be quite similar, but as the more expensive European car has come up warranty, the running costs go up. So in your heart of hearts, if you'd like to be driving European, then you are think, oh! The tax efficiency is actually a little bit better in that car because of course cars are such an emotive purchase.
And Joyce, going back to one of the earlier comments, why FBT. We know that salary alone isn't a motivator, it's a hygiene factor. So if we're looking to engage more with our staff, then attending to issues like this in cars are so highly emotive becomes really important from an employee engagement perspective.