Fuel costs vs total running costs inc depreciation.

[BigMuz]

I'd still like to know how many people buy new cars and turn them over after 2 years?

I know, but that was an example I pulled out of my arse.

What about a 4 year old Falcon, is that more reasonable?

http://www.redbookasiapacific.com/au...p?key=FORD02GU
Falcon Forte. 2002 6 cyl sedan.


Age: 4 years
Average kays: 80000. (mean)
New price: $34 000
Current trade in price: $6 900 (mean)

Fuel usage at (say) 12 litres/100k average: 9600 litres.
Cost at $1.02 =$9 792
Cost at $1.40=$13 440

Difference $3648

Depreciation = $27 100

So the cost of ownership at old fuel prices is;

$27 100 depreciation
$9 792 fuel
$2 400 maintenance, say 8 services @ $300 each
$4 000 rego and insurance, say $500 plus $500 * 2

Total $43 292 or 54 cents per km.

With today's fuel prices:

Total $46 940 or 58 cents per km.


And $1.40 was chosen to be an exaggeration as well. That is true for rural areas where we get ropyally fucked for fuel, but the difference would never be that much in Sydney.

4 cents a km, or 6 percent increase in total cost for a 40% increase in fuel prices.



Dear John Howard, please don't use my taxes to drop the fuel prices, instead, please spend more to hold interest rates down.

HTH

Muz

[browny]

Alot... in my building at lease half the residents lease/hire purchase vehicles on a biannual basis. I was questioned as to why I don't do it as I think wholly owning your vehicle is unfashionable now.

I know 0% about leasing, so the first thing I'd ask is whether these calculations are at all relevant for a leased vehicle.

[Captiva Fan]

What about a 4 year old Falcon, is that more reasonable?

Well ... AU's are a special case, IMHO.
Better to use a Commode (which won't be worth that much more, but it takes away any ability to argue against your figures).
Depreciation has always been the big cost; but it doesn't hit you day-to-day in the hip-pocket nerve & you've already accepted it when you bought whatever you bought. It's already been factored in, and isn't an extra (variable) cost.

Dear John Howard, please don't use my taxes to drop the fuel prices, instead, please spend more to hold interest rates down.

If he spends more, doesn't that send inflation up & interest rates follow?

I know 0% about leasing, so the first thing I'd ask is whether these calculations are at all relevant for a leased vehicle.

All you need to know is that, if the lease is a officially (ie. as reported to the ATO) of a particular type, then you pay FBT on the monthly "rental" for the vehicle rather than paying income-tax on that money. One way of calculating the FBT on that particular type of lease is charged at varying rates, depending on the number of kilometres you do per year ... there are different brackets, and I can't remember what the rates are. However, if you do 25k kms a year then the FBT rate is (I think) 20% ... compare that to the top tax rate of 45c in the dollar, and you can put all car-related costs (fuel, services, tyres, etc) onto your lease & pay the reduced tax rate.
There are restrictions, there are a few ways to calculate FBT, and your company/employer does have to do something for you to be able to calculate FBT like this. However - this is what most are doing.

[GTSBoy]

And really, if you are earning less than $75k, so that your top tax rate is only 30%, then you get bugger all return out of a lease.

I am not sure why there are so many discussions about leasing cars on what is supposed to be an ethusiasts' forum. I much prefer 100% owning a car that cost $20k that might be worth $14k 6 years later (using my actual car as example) that I am free to modify however I want (within legal limits or not, which is up to me) and which I can feel, is MINE. If I lease some car, it is never mine, I know I have to give it back. That is fine for business vehicles, just does not seem to be right for a personal possession.

But then, I am not living in Sydney and obsessed with making/scraping every $ in order to keep up with every other grasping bugger that lives there too.

[browny]

My perception of leases is that it's a cheaper way of always having a new car (as opposed to buying and selling every couple of years). You still end up paying a premium to have the latest and greatest tho, it's just less than the alternative.

But like I said, I know really know nothing about it and feel free to set me straight.

Not that it really matters for me because the next car I buy will likely be 2nd hand 2-3 years old <80,000km and get driven for 10+yrs until it dies. Let someone else take the initial depreciation hit. Repeat until there's no oil left.

[MartyHusseinXF]

All the lease comments in here are horribly wrong.
Every single one of them

I save approximately 3 thousand a year with the employee contribution method on the WRX, running costs, rego, insurance, fuel etc all FBT free.
I can modify the car however the hell I want (as long as its roadworthy).
I can live in Bankstown / Lakemba and pay no more for insurance.

You don't have to give a car back GTSBOY - that makes no sense, you owe them _money_ not a car.

[Captiva Fan]

If I lease some car, it is never mine, I know I have to give it back. That is fine for business vehicles, just does not seem to be right for a personal possession.

But hang on, a car is a depreciating asset; if you're being all 'financial' about it, is it best to put one's own cash into something that's always going to be worth less tomorrow?

I save approximately 3 thousand a year

Only compared to buying a brand new one outright yourself.
Not compared to, say, buying a 1yo one.
I considered a new car lease ... didn't see the point in dropping $13k/yr ($9k in teh first year 'cos we'd sell the Commode) on what would basically just be "transport" when the Commode is currently costing $4k/yr to run. My point being that you can only compare to what you would have done anyway, if you're talking comparative costs.

[MartyHusseinXF]

Only compared to buying a brand new one outright yourself.
Not compared to, say, buying a 1yo one.
I considered a new car lease ... didn't see the point in dropping $13k/yr ($9k in teh first year 'cos we'd sell the Commode) on what would basically just be "transport" when the Commode is currently costing $4k/yr to run. My point being that you can only compare to what you would have done anyway, if you're talking comparative costs.

Argh, come on Forg

My car was not brand new when I started leasing it. SHOCK - you do not have to lease a brand new car.

It was a 27k second hand WRX. (exactly what I was looking at buying regardless) - all my calculations are done based on this.

So I believe, I am comparing correctly

[Captiva Fan]

Good point, fair cop Guv - I forgot you don't have to lease a new car.
I do tend to forget that part of why it doesn't work for me is that I don't do the 40k kms a year you must be doing; for me it's under 15k kms, and that's a tax problem with a leased car (relatively-speaking).

[browny]

Marty, Are you able to show me the calcs of leasing vs buying?

[MartyHusseinXF]

Good point, fair cop Guv - I forgot you don't have to lease a new car.
I do tend to forget that part of why it doesn't work for me is that I don't do the 40k kms a year you must be doing; for me it's under 15k kms, and that's a tax problem with a leased car (relatively-speaking).

I do about 16 thousand kms a year, stop with the generalisations please!

Its not a tax problem with a leased car unless the leased car is worth big $$.

Any car with relatively high running costs compared to its actual $ value (ie, anything fun) is really worthwhile to lease using ECM method (your bean counter would have been using the "standard" novated lease).

[MartyHusseinXF]

Marty, Are you able to show me the calcs of leasing vs buying?

I could, but, effort and its misleading, pick a car, ask an accountant / lease person, everyones situation is different.

[browny]

I meant yours, I'm just interested in where the 3k saving is coming from.

[HoonBoy]

I did the figures on a 2003 XR8 doing 12,000kms a year and I would of been worse off leasing then purchasing. That is with an employer contribution as well. Do you work for gumbyment or charity? They have different rules.

[MartyHusseinXF]

I meant yours, I'm just interested in where the 3k saving is coming from.

I pretty much spelled it out above.

Cheaper insurance + it comes out of gross salary ~ $1k saving (More actually, its a WRX in Sydney and im 25 with a license loss, id be butt-raped on insurance otherwise.)

A set of tyres for the thing costs $1400 which comes out of gross salary, $520 saved there. I'm pretty heavy on tyres.

Each tank of fuel, $30 saved there (an $85 tank of fuel, $55 actual cost)

Look up how Employee contribution method works, if its a cheap car (like mine) but expensive to run its very worthy, theres no FBT liability to pay out at the end of the year (this statement might be misleading), I pay the first $4900 of finance and running costs out of my post-tax salary, and the rest comes out of gross.