Pushing The Envelope ( Company Car )

[Steve88]

Just hunting around for a little advice and maybe some input into a new company car for work . My position at work is shifting and I`ll be approaching the end of my lease with my current company car . I would love to buy something that I can purchase at the end of the lease and ideally hang onto . I have currently been approved for any 4x4 type of utility , C-Series Sedan or Wagon and a few other new models . 

I would say my budget is around 90-100k ( little more if I can bat my eye-lids pretty enough  )  and was thinking it would be great to get another 911 . My role will be in sales so ill be driving in traffic everyday around the beautiful and congested city of Melbourne / Victoria so an automatic would be ideal . The only pitt fall is my dog is the size of a horse and can't fit into the back of it . 

Now comes the tricky part ; The value proposition . Remembering that I`ll most likely ( 99.9% ) be obligated to an automatic due to my wife ( we work together ) having to be able to drive it what series and models should I look at and can afford .  If I could dream big it would be a 964 (C2) or a 993 ( c2) but may be pressured to get something newer like a 997 . Must be a coupe .

PDK 992 Gen II is out of the budget at this stage so its really series 1 997 Auto that would be up for contention . Not a 996 fan personally ( no offence ) .

This will be a company car and ill get to keep my current fuel card so services and up-keep will be afforded by the company and not me personally . 

Any advice if anyone is cruising around on a daily basis in anything similar please chime in as i would love some practical and factual advice . 

Kind regards

Steve

[flamingporsche]

I assume that you're talking about novated lease?  Don't quote me, it's been a few years since my last lease car... I think that a novated lease vehicle has to be ~5 years old at the end of the lease??  If correct, that would mean getting into a 2 or 3 year old Cayman for it to be in your budget.  Or get an amazing deal...

Not saying that you can't get a lease on an older vehicle, just won't get the benefits that come with novated leasing.

Happy to be proven wrong on this one.........

[Diamond911]

Hi Steve,

As per flaming's comment above, my novated lease for my 4x4 was through Autopia and the conditions stipulated a car less than 4 years old.  Not sure if this was an Autopia or company requirement or across all leases.

[hugh]

Generally need to be no more than 10 years old by the end of the lease term, so yes no older than 5 years is usually the requirement. Having said that it will get harder the older it is (say 12 months ok, 3 - 4 years no so much) as these will need to also be valued by the lender (whom tend to take a conservative approach). 

Typically it would also need to be through a dealer although this may not always be applicable. 

Cayman, Cayenne or Macan would be the most likely options in this regard. 

[Midnight 911]

I see it as a question of what your budget would be for monthly payments. My advice would to buy as new as you can afford. Go and have a meeting with a Porsche dealer and speak with their finance team. You might be surprised at what you can get for the monthly payment you're willing to cough up. Get a Porsche warranty, with the option to extend when it expires. 

I say 997.2 with a balloon payment....Aim high!

[Steve88]

The company will purchase the car outright and in 5 years I will be able to buy it from the company as per my last two cars . 

My brother in-law just got a 997 & the company just purchased it outright like an asset and the car will depreciate at a certain rate 

Ill look into the year restrictions of what i can get as something does ring a bell that it must be under 10 years though . 

Thanks heaps 

Steve

[michel]

There was a lease scheme been promulagated 6-7 years ago where you could for instance lease your datto 1600, restore it while driving over term of agreement under running maintenance costs and then reap benefits at end of term when buying it outright. Was it legal in terms of tax law don't know, but it was been touted by a columnist in a fleet magazine .

hmmmmm 356 outlaw? Or covin salt bed laker ??? 

[Mike D'Silva]

964 C2... as a company car? sounds crazy but I hope you can.

Hope you like red, and tan interior... 

[Pork Chops]

Macan. Cayennes are ugly and everything else will suck at being a shared daily with your wife and a massive dog. I have an auto 993 and after 3 days of to and from work (no stop start) I'm over it. There is a lot to be said about mod cons of modern cars. My daily is a 335 (wagon ?) and it has AC that works well comfort access, modern everything and it's so comfy. Sorry to rain on the parade.

[ByronBayChris]

I have a 993 tip for sale in your price range. I now use it as a.daily here......works well with two kids in the back. 

[smule]

You'd have a lot more fun and be more comfortable in something like a RS4 wagon... I share the sentiments of mod cons for a daily...  Would more likely be easier to lease through a novated or chatteled mortgage secured by the business. 

[smit2100]

I assume that you're talking about novated lease?  Don't quote me, it's been a few years since my last lease car... I think that a novated lease vehicle has to be ~5 years old at the end of the lease??  If correct, that would mean getting into a 2 or 3 year old Cayman for it to be in your budget.  Or get an amazing deal...

Not saying that you can't get a lease on an older vehicle, just won't get the benefits that come with novated leasing.

Happy to be proven wrong on this one.........

 Like you, not 100% sure if original poster is talking novated lease.  Appears to be more of a company car as part of their salary package and the company flows down to the employee the option to buy out the car at the end of the company lease.  Eg Company buys the car at the end of the lease , and effectively sells it to the Employee at the buyout price??

If talking novated lease, like to offer some opposing views on a novated lease.   I consider there are benefits with an older vehicle, but that is within very narrow set of requirements 

My experience with novated leases is that it depends on the employer and the leasing company the employer engages along with policies and packages of what that leasing company offers based on the depth of their administrative resources.  I have it on very good authority that a 2003 996 turbo based on some arm twisting negotiating with both those parties mentioned above can be packaged as a novated lease. So no 5 years, 8 years, 10 years etc age restrictions.  However I have come across  requirements that the vehicle had to be 8 years or younger at the end of a the lease was a cutoff (my first novated lease and more to do with lease financing requirement).  Some employers / salary packaging firm and their leasing financers allow prestige sports cars if  certain boxes are ticked.

Personal opinion, and perhaps an off the wall contrarian view of  thinking and by no means financial / tax advice, but if you have access to cash (either by way of mortgage offset or other means for an outright purchase), someone needs to explain to me the bottom line calculus of entering into a novated lease for a prestige car unless the novated lease is down the list tax planning strategy to minimise taxable income for a salaried employee  or their is a bottom line benefit of being able to claim costs associated servicing, repairs and preventative maintenance costs (older vehicles) in pretax dollars within a framework that delivers you a bottom line advantage.   Eg FBT at 20% of market value, luxury car levy above Circa 58k of car lease value and car lease financing interest rates are big costs that have to be offset notwithstanding costs are being paid pre tax even at the top marginal rate

If one is committing to a novated lease on a used prestige Porsche, never understood the logic of committing to a novated lease and not taking advantage of a sale and lease back coupled with the minimum period of a ONE year novated lease if that is on offer.  Much more flexibility when you combine that with the ability to  buy out at the first year or roll over from year to year (drop the lease value if possible based on any market value depreciation) and possibly  have a lower bottom line cost compared to say a fixed 3, 4 or 5 year lease with the residual payout.  

Also never understood the logic of not trying to minimize the cost you sell the car back to leasing company. under a sale and lease back  Would have thought maximizing the ratio of % of total claimable running costs / (base lease payment, lease interest , fbt and luxury sales tax) helps you get your best bang for buck under a novated lease

So particularly for an older vehicle, that would suggest 

1) Go for a high Insurance market value relative to premium . 

2) Have the rego and insurance dates preceed just before the start of the one year lease.  Eg  get to claim two years of insurance and and rego in the one lease year

3) For say 996 turbo, in terms of replacement of parts, servicing, preventative maintenance, I am assuming its is not uncommon for the dealer / indy not have some 996tt genuine parts off the shelf,  but offer some alternative genuine Porsche parts that happen to be available on the shelf such as 996gt3 (sway bars, control arms) / 997 parts (gear box selector, coils, throttle body, GT2RS intercoolers)  that are off the shelf and which fit and have no downside on having them installed. (Not performance parts/ modifications, just genuine factory replacement parts, that happen t perform better than the orginal ones

4) In month 11 and 12 of the lease before buyout, every possible consumable wearing part or known to be eventual  maintenance item is replaced

5)To minimise the denominator in the ratio above, ensure you sell the car at the lowest reputable market value you can support really helps tat.  For me that was a lowest number on a glass's guide for my car  Thank  F%^& the leasing company don't consult with some fellow bretheran in this forum who aspouse to preach market values and what one should outlay (happen to be double the value of the glass's lowest value in my case)

In terms of the opening post and yours on benefits of older cars and pushing the envelope on a novated lease, wouldn't this be more appropriate choice of vehicle for pushing the envelope

You buy a 930 / 964 that is roadworthy and a daily driver of course, and you have managed to get a one year sale and lease back (classic vintage sports car).  But car was not running right after the first month, motor and drivetrain rebuild required based on the indy's inspection report amongst other items that needed addressing.  To bring it up to scratch, those parts for that car are illusive and its going to take time to  repair at the only indy that is trusted and they have a backlog  so you tell the employer  and lease company here are the keys and my other set are at the mechanics and its not available for private use.  Three month estimate turns to 11 months and you have date stamped odometer readings that so that next to no kilometers were travelled in that 11 months so you claim for a dispensation to cut the fbt bill from 20% to 2%.   Just  happens to be before your lease runs out , and you need to buy the lease out, the car is ready (back to awesomeness, eg motor and some other findings of items that needed addressing when the motor was getting done) was also addressed.  When you are about to pay out the residual, the lease company says to you, wow, we certainly got that that initial lease package costs estimate wrong eg 4k budget vs 40k actuals  on repairs and maintenance.  Well at least that was offset in part by the FBT, eg 15k budget vs 1k actuals and your over budget spend was funding by pretax dollars.

. 

  

 

 

[michel]

Smit you are one righteous dude .. You in between shifts  

by sunday morning all the shit heap 928 collectables will now have dried up 

You'd have a lot more fun and be more comfortable in something like a RS4 wagon... I share the sentiments of mod cons for a daily...  Would more likely be easier to lease through a novated or chatteled mortgage secured by the business. 

rs2

[Pork Chops]

 Like you, not 1005 sure if original poster is talking novated lease.  Appears to be more of a company car as part of their salary package and the company flows down to the employee the option to buy out the car at the end of the company lease.  Eg Company buys the car at the end of the lease , and effectively sells it to the Employee at the buyout price??

If talking novated lease, like to offer some opposing views on a novated lease.   I consider there are benefits with an older vehicle, but that is within very narrow set of requirements 

My experience with novated leases is that it depends on the employer and the leasing company the employer engages along with policies and packages of what that leasing company offers based on the depth of their administrative resources.  I have it on very good authority that a 2003 996 turbo based on some arm twisting negotiating with both those parties mentioned above can be packaged as a novated lease. So no 5 years, 8 years, 10 years etc age restrictions.  However I have come across  requirements that the vehicle had to be 8 years or younger at the end of a the lease was a cutoff (my first novated lease and more to do with lease financing requirement).  Some employers / salary packaging firm and their leasing financers allow prestige sports cars if  certain boxes are ticked.

Personal opinion, and perhaps an off the wall contrarian view of  thinking and by no means financial / tax advice, but if you have access to cash (either by way of mortgage offset or other means for an outright purchase, someone needs to explain to me the bottom line calculus of entering into a novated lease for a prestige car unless the novated lease is down the list tax planning strategy to minimise taxable income for a salaried employee  or their is a bottom line benefit of being able to claim costs associated servicing, repairs and preventative maintenance costs (older vehicles) in pretax dollars within a framework that delivers you a bottom line advantage.   Eg FBT at 20% of market value, luxury car levy above Circa 58k of car lease value and car lease financing interest rates are big costs that have to be offset notwithstanding costs are being paid pre tax even at the top marginal rate

If one is committing to a novated lease on a used prestige Porsche, never understood the logic of committing to a novated lease and not taking advantage of a sale and lease back coupled with the minimum period of a ONE year novated lease if that is on offer.  Much more flexibility when you combine that with the ability to  buy out at the first year or roll over from year to year (drop the lease value if possible based on any market value depreciation) and possibly  have a lower bottom line cost compared to say a fixed 3, 4 or 5 year lease with the residual payout.  

Also never understood the logic of not trying to minimize the cost you sell the car back to leasing company. under a sale and lease back  Would have thought maximizing the ratio of % of total claimable running costs / (base lease payment, lease interest , fbt and luxury sales tax) helps you get your best bang for buck under a novated lease

So particularly for an older vehicle, that would suggest 

1) Go for a high Insurance market value relative to premium . 

2) Have the rego and insurance dates preceed just before the start of the one year lease.  Eg  get to claim two years of insurance and and rego in the one lease year

3) For say 996 turbo, in terms of replacement of parts, servicing, preventative maintenance, I am assuming its is not uncommon for the dealer / indy not have some 996tt genuine parts off the shelf,  but offer some alternative genuine Porsche parts that happen to be available on the shelf such as 996gt3 (sway bars, control arms) / 997 parts (gear box selector, coils, throttle body, GT2RS intercoolers)  that are off the shelf and which fit and have no downside on having them installed. (Not performance parts/ modifications, just genuine factory replacement parts, that happen t perform better than the orginal ones

4) In month 11 and 12 of the lease before buyout, every possible consumable wearing part or known to be eventual  maintenance item is replaced

5)To minimise the denominator in the ratio above, ensure you sell the car at the lowest reputable market value you can support really helps tat.  For me that was a lowest number on a glass's guide for my car  Thank  F%^& the leasing company don't consult with some fellow bretheran in this forum who aspouse to preach market values and what one should outlay (happen to be double the value of the glass's lowest value in my case)

In terms of the opening post and yours on benefits of older cars and pushing the envelope on a novated lease, wouldn't this be more appropriate choice of vehicle for pushing the envelope

You buy a 930 / 964 that is roadworthy and a daily driver of course, and you have managed to get a one year sale and lease back (classic vintage sports car).  But car was not running right after the first month, motor and drivetrain rebuild required based on the indy's inspection report amongst other items that needed addressing.  To bring it up to scratch, those parts for that car are ellusive and its going to take time to  repair at the only indy that is trusted and they have a backlog  so you tell the employer  and lease company here are the keys and my other set are at the mechanics and its not available for private use.  Three month estimate turns to 11 months and you have date stamped odometer readings that so that next to no kilometers were travelled in that 11 months so you claim for a dispensation to cut the fbt bill from 20% to 2%.   Just  happens to be before your lease runs out , and you need to buy the lease out, the car is ready (back to awesomeness, eg motor and some other findings of items that needed addressing when the motor was getting done) was also addressed.  When you are about to pay out the residual, the lease company says to you, wow, we certainly got that that initial lease package costs estimate wrong eg 4k budget vs 40k actuals  on repairs and maintenance.  Well at least that was offset in part by the FBT, eg 15k budget vs 1k actuals and your over budget spend was funding by pretax dollars.

. 

  

 

 

Sweet Jesus what is that. Quoted for length. 4th para, you didn't close the first set of brackets.

[smit2100]

Sweet Jesus what is that. Quoted for length. 4th para, you didn't close the first set of brackets.

Now fixed, thanks for reading it up  until at least that point

[tazzieman]

FRAT, But Michel was right about da scheme 

[Blue964]

 Like you, not 100% sure if original poster is talking novated lease.  Appears to be more of a company car as part of their salary package and the company flows down to the employee the option to buy out the car at the end of the company lease.  Eg Company buys the car at the end of the lease , and effectively sells it to the Employee at the buyout price??

If talking novated lease, like to offer some opposing views on a novated lease.   I consider there are benefits with an older vehicle, but that is within very narrow set of requirements 

My experience with novated leases is that it depends on the employer and the leasing company the employer engages along with policies and packages of what that leasing company offers based on the depth of their administrative resources.  I have it on very good authority that a 2003 996 turbo based on some arm twisting negotiating with both those parties mentioned above can be packaged as a novated lease. So no 5 years, 8 years, 10 years etc age restrictions.  However I have come across  requirements that the vehicle had to be 8 years or younger at the end of a the lease was a cutoff (my first novated lease and more to do with lease financing requirement).  Some employers / salary packaging firm and their leasing financers allow prestige sports cars if  certain boxes are ticked.

Personal opinion, and perhaps an off the wall contrarian view of  thinking and by no means financial / tax advice, but if you have access to cash (either by way of mortgage offset or other means for an outright purchase), someone needs to explain to me the bottom line calculus of entering into a novated lease for a prestige car unless the novated lease is down the list tax planning strategy to minimise taxable income for a salaried employee  or their is a bottom line benefit of being able to claim costs associated servicing, repairs and preventative maintenance costs (older vehicles) in pretax dollars within a framework that delivers you a bottom line advantage.   Eg FBT at 20% of market value, luxury car levy above Circa 58k of car lease value and car lease financing interest rates are big costs that have to be offset notwithstanding costs are being paid pre tax even at the top marginal rate

If one is committing to a novated lease on a used prestige Porsche, never understood the logic of committing to a novated lease and not taking advantage of a sale and lease back coupled with the minimum period of a ONE year novated lease if that is on offer.  Much more flexibility when you combine that with the ability to  buy out at the first year or roll over from year to year (drop the lease value if possible based on any market value depreciation) and possibly  have a lower bottom line cost compared to say a fixed 3, 4 or 5 year lease with the residual payout.  

Also never understood the logic of not trying to minimize the cost you sell the car back to leasing company. under a sale and lease back  Would have thought maximizing the ratio of % of total claimable running costs / (base lease payment, lease interest , fbt and luxury sales tax) helps you get your best bang for buck under a novated lease

So particularly for an older vehicle, that would suggest 

1) Go for a high Insurance market value relative to premium . 

2) Have the rego and insurance dates preceed just before the start of the one year lease.  Eg  get to claim two years of insurance and and rego in the one lease year

3) For say 996 turbo, in terms of replacement of parts, servicing, preventative maintenance, I am assuming its is not uncommon for the dealer / indy not have some 996tt genuine parts off the shelf,  but offer some alternative genuine Porsche parts that happen to be available on the shelf such as 996gt3 (sway bars, control arms) / 997 parts (gear box selector, coils, throttle body, GT2RS intercoolers)  that are off the shelf and which fit and have no downside on having them installed. (Not performance parts/ modifications, just genuine factory replacement parts, that happen t perform better than the orginal ones

4) In month 11 and 12 of the lease before buyout, every possible consumable wearing part or known to be eventual  maintenance item is replaced

5)To minimise the denominator in the ratio above, ensure you sell the car at the lowest reputable market value you can support really helps tat.  For me that was a lowest number on a glass's guide for my car  Thank  F%^& the leasing company don't consult with some fellow bretheran in this forum who aspouse to preach market values and what one should outlay (happen to be double the value of the glass's lowest value in my case)

In terms of the opening post and yours on benefits of older cars and pushing the envelope on a novated lease, wouldn't this be more appropriate choice of vehicle for pushing the envelope

You buy a 930 / 964 that is roadworthy and a daily driver of course, and you have managed to get a one year sale and lease back (classic vintage sports car).  But car was not running right after the first month, motor and drivetrain rebuild required based on the indy's inspection report amongst other items that needed addressing.  To bring it up to scratch, those parts for that car are illusive and its going to take time to  repair at the only indy that is trusted and they have a backlog  so you tell the employer  and lease company here are the keys and my other set are at the mechanics and its not available for private use.  Three month estimate turns to 11 months and you have date stamped odometer readings that so that next to no kilometers were travelled in that 11 months so you claim for a dispensation to cut the fbt bill from 20% to 2%.   Just  happens to be before your lease runs out , and you need to buy the lease out, the car is ready (back to awesomeness, eg motor and some other findings of items that needed addressing when the motor was getting done) was also addressed.  When you are about to pay out the residual, the lease company says to you, wow, we certainly got that that initial lease package costs estimate wrong eg 4k budget vs 40k actuals  on repairs and maintenance.  Well at least that was offset in part by the FBT, eg 15k budget vs 1k actuals and your over budget spend was funding by pretax dollars.

. 

  

 

 

I love your work Smit. I am so happy you have stuck to your guns and not caved into the current trend of dumbing down posts by assuming all posts must be no longer than 5 sentences because nobody on this plant has the attention span or intellect to process more than 5 sentences in one go. Be true to yourself Smit and be sure to stick to lengthy posts that go on for many paragraphs--there are plenty of people out there capable of reading your comprehensive and well reasoned posts. Oh and BTW, stay away from twitter 'cause I doubt you'll like it:)

[smit2100]

How did you guess I am not on twitter.  But maybe in ten years time,  but it won't be to tweet.  Eg Don't be surprised if twitter replicate their current strategic thinking of live feeds of US NFL games via twitter on smartphones with an eventual tie up with ESPN down the track  to lock away broadcasting rights.  Then  AFL and NRL rights won't be far off.

 

[tazzieman]

 

This will be a company car and ill get to keep my current fuel card so services and up-keep will be afforded by the company and not me personally . 

Novated ; you still pay just in pre tax $. Unless you have a special employer. And for full benefit you need to travel plenty of km , which will hit resale (even though it's a Porsche) and increase service costs. 

As for when you need to take your large woolly dog across down to Pampered Pooches in Toorak or Woolymooloo , a coupe might be a tad tight!

The new Jag SUV looks good.

 

[michel]

Claude the collie rides up front when occasion arises - though I wash him in the river .

That RS2 would make a dandies commute car . 

But taz probably and depressingly got it right. Surprised he didn't say landis

edit landie 

[tazzieman]

Surprised he didn't say landis 

Ah you mean Floyd Landis? Well here's what he does, user friendly , practical and green Not sure if you can novate one or not.

[Pork Chops]

Seems to me that the company will buy the car using finance so it's not a novated lease which is where the employee buys / leases the car and the company makes the lease payments on behalf of the employee as part of their remuneration.  Broadly the company can use chattel mortgage or hire purchase.  It will pay the balloon at the end of the finance period and then own the vehicle.  It may then sell the vehicle to the employee for a certain amount depending on whether they are still there, and how the relationship is going.  If I was the company I'd be considering things like what if the employee leaves or doesn't want the car at the end of the term.  How well the company can finance the car will come down to it's size and relationship with financiers.  Through my business I've leased all sorts of dodgy cars because we have a big fleet and their lend is not only secured by the car but also the business' balance sheet.  It's also a matter of trust and how long you've been doing things without mishap.

Seems to me the employee considerations are a.) how well can you do in getting the most $$ to run car b.) getting full choice of what car to run c.) getting good terms on the purchase of the car at the end of the lease d.) using the choice you've negotiated wisely, and picking the right car for your needs over the term of the lease.

That comes down to salary / package negotiation, general employment relationship and picking the right car.  

So, bat your eye lids, keep performing, be nice and pick a Macan and you'll be right.

[edgy]

I love your work Smit. I am so happy you have stuck to your guns and not caved into the current trend of dumbing down posts by assuming all posts must be no longer than 5 sentences because nobody on this plant has the attention span or intellect to process more than 5 sentences in one go. Be true to yourself Smit and be sure to stick to lengthy posts that go on for many paragraphs--there are plenty of people out there capable of reading your comprehensive and well reasoned posts. Oh and BTW, stay away from twitter 'cause I doubt you'll like it:)

I agree mate ^^ 

Smit my accountant would love this content.. that is "crafty accounting" at its best! Do you have a background in accounting? It sure looks that way, because you definitely have a deeper understanding of tax (and FBT for that matter) than most. 

 

[tazzieman]

 a deeper understanding of tax (and FBT for that matter) than most. 

Tax? What's this I hear about Tax?

[Steve88]

Very valid and interesting points . 

I think at this stage it will have to be a newer model car. I would like it to be another 911 but the PDK price is just not within my budget at the moment . 

I did get an invite to the launch of the Jag F-Pace and it was a real let down TBH .  My better half has a RR so this was purely a selfish move by myself to get something slick. 

Not the biggest fan of the Audi instruments as I personally think the dash mounted screen is more of an after thought ( This also being my hesitation for the new C-Series ) .

Thanks for the input guys , maybe time for me to sit down with the accountant with this page open and discuss .