Calculating Operating Lease early break fee?

I get asked all the time why I don't have a 'new' car, since I'm self-employed and it's 'tax deductable'. People wrongly think you get the car for free. You don't - at best you save about 1/3rd on the total cost. I'd rather drive an older vehicle, pay out the 1/3rd in tax, and have the 2/3rds I'd have otherwise have spent to do other things instead. Or better still not have to go to work if I don't wish to.

I can't think of anything worse than having to go to work to make money to give to someone else just so I could drive a newer car. A newer car doesn't add any value to my business (in many cases it actually detracts - if you look like you're making too much money people will try and screw you down!) but people try to justify the extra expense with all these wishy-washy empty excuses like fuel savings. They need to sort the 'needs' from the 'wants'.

Hell yeah! We sold our late model bounty ute and bought a 4k falcon as a business vehicle. Just made sense. Its tidy so doesnt look like we are idiots and It was cheap!

Except don't you have to pay tax on the difference if you sell it for more than the book value!

Funnily enough, our company went from leasing all our vehicles to owning a chunk of them because the bank wanted us to own more stuff.

Reps get leased cars, but managers get a budget to purchase up to.

Its abit like going to the Lawyer, Accountant, Doctor, Dentist etc.You walk in to be greated by marble floors, leather waiting chairs, art work on the walls, Gold door handles, fish tanks and who knows what other flash things.You walk out after an hour and about $500 lighter and then say to yourself "I just paid for all that flash image".The flash cars that get up my nose are the insurances reps who all have the latest and greatest Merc, Bimmer Lexus et al and my immediate reaction is I'm paying too much for the product you are trying to sell me as clearly you make far to much money.have a amate with an engineering business.He goes to work in a 80's Commie (the 2 Bimmers are at ahome with the boat), tells everyone that times are tough etc.Never gets asked to cut his prices and hardly ever has the staff asking for pay increases etc.Flash image is not the way to grow a business IMHO.The killer of every business is spending far too much when you don't have to.

Correct - so no point in selling it!As far as I know, there is no rule that says you can't just buy another, as long as both are used 100% for business.

Or if you are trading it in the dealership will know how to manipulate the figures so you don't get stung.

My Wife's company car is a 1982 380se Mercedes Benz, in excellent condition. A big old tank with with shiny paint, and oozing charisma. Gets regular positive comments.

According to the IRD it is worth virtually nothing, so her fringe benefit tax is bugger all.

The image is right up there though. Much more than any run of the mill Mazda6, Falcon, Commodore, etc etc.