In response to the effects on many sectors of the economy of the coronavirus pandemic, Governments at all levels have released a range of measures to support both individuals and businesses. There are numerous stimulus packages, support measures and recovery plans to analyse, digest, apply for and implement to assist your business deal with the fall-out from COVID-19.
For businesses considering purchasing new cars, the Instant Asset Write-Off (IAWO) is worth noting.
Instant Asset Write-Off – The Facts
- The IAWO was announced in the first stimulus package and is designed as a time-limited 15 month measure to boost the economy in the short-term.
- Increase in IAWO from the current level of $30,000 to $150,000 for businesses with an aggregated annual turnover up to $500 million as at 30 June 2020.
- To claim the IAWO the assets, in this discussion the cars, must be purchased and used by 30 June 2021.
- The measure applies on a ‘per asset’ basis so multiple cars can be purchased under the IAWO initiative.
- We recommend you refer to the complete fact sheet at https://treasury.gov.au/sites/default/files/2020-04/Fact_Sheet-Delivering_support_for_business_investment.pdf
- Discuss your individual business circumstances with your accountant
Selecting Your Car Finance for the IAWO
- The IAWO is only available to businesses, not individuals, so only commercial finance products not personal car loans are applicable.
- Jade Car Loans offers a comprehensive range of commercial finance products for the purchase of cars, but not all will be applicable for the IAWO
- Car Leasing is an off-balance sheet finance facility and cars purchased under this type of loan would not be eligible for IAWO. With leasing, the car will appear on the lenders balance sheet. For businesses to receive the benefit of the IAWO measure, the asset must appear on their balance sheet.
- Purchasing a car of a value between $30,000 and $150,000 with Business Car Loans Hire Purchase (CHP) and Chattel Car Mortgage should make the car an eligible asset under the IAWO measures.
- Selecting which is the most suitable finance product for your business, should be made in conjunction with your accountant.
- While this IAWO measure associated with the coronavirus stimulus package has benefits to some businesses, it may not offer the same level of advantage to others.
- Some businesses may see the advantages of car leasing for their car purchases, to outweigh the benefits derived from a CHP or Chattel Mortgage loan with the IAWO benefits.
- The IWAO may be the deciding factor if you are considering which vehicle to purchase.
Whichever finance product you select, you are assured that Jade Cheapest Car Loans will support you with our cheap car loan commitment and better interest rates promise.
To comply with COVID-19 distancing restrictions and to protect our staff and clients, we have transitioned to a work from home structure for the time being. However, our operations are not dependent on many in-person interactions so the impact on our operation is minimal.
Jade Car Loans is providing continuity of our high level services across all sectors of our business. To ensure your car finance application is processed as swiftly as possible and the loan finalised quickly.
To discuss the options for your car finance requirements contact us on 1300 000 003 to speak with a Jade Car Loans consultant.
DISCLAIMER:THE INFORMATION PROVIDED IS FOR GENERAL CONSIDERATION. ANY REFERENCE TO OFFICIAL GOVERNMENT POLICIES HAS BEEN SOURCED FROM AUSTRALIAN GOVERNMENT AND STATE GOVERNMENT SOURCES. NO LIABILITY IS ACCEPTED FOR ANY ERRORS IN PRESENTATION OR INTERPRETATION OF THE FACTS AS PROVIDED BY THESE SOURCES. WE ADVISE ALL INDIVIDUALS AND BUSINESSES TO REFER TO THEIR ACCOUNTANT OR FINANCIAL ADVISOR FOR PROFESSIONAL ADVICE SPECIFIC TO THEIR INDIVIDUAL CIRCUMSTANCES.