skc

I spoke with my dealer who offered to get me into a new RX 8 without effecting my lease payments. This is a tempting offer as this gets me into a new vehicle with new warranty , etc.

They have offered around $45 000 trade in on my '03 leather pack with 37 000 on the clock. I think the trade in value is higher then normal but there is no negotiation on the driveaway price of $62 000.

I am tempted and may jump in if they let me keep some of my accessories on my current vehicle.

skc

mikeyr

Based on my limited research I'd say that wasn't a bad deal on an 06' car. Good trade value would be about $39, given that a dealer has to add GST & a margin. That makes your driveaway, GST incl of around $56 (or about $51) gst ex.

Worth checking on the RX8 finance deal which was 3% on 05' stock, finished end of Feb I think but worth a double check. Vs regular finance deal that's worth a couple of hundred a month.

EZZY

guess if the "numbers" all adds up to your liking... might as well go for it....
there is nothing like the new car smell ;-p

xxup

What colour are you considering?

Are you tired of being a slave to black?

glenn

I have just done the same thing and traded my 03 Black LP for a 05 Red LP.

My black car was due for rego, tyres and the 50,000km service so I thought if I can make the numbers add up, why not.

And as much as I love black (best colour for an RX-8) I dont regret changing colours. I have washed the red car once in a fortnight and it still looks good. The black car looked ordinary the next day.

skc

I hope the come good with the transfer of some of the accessories then we may have a deal.

I am considering the new blue/ aqua, grey or maybe red. I am also thinking about the sunroof as well. I guess according to Mikes figures it seems like a good deal.

The dealer also reminded me that I have claimed a large chunk of the depreciation back in tax as well which makes the drop in value palatable.

skc

glenn

Yeah they said that to me too. It still doesnt make you feel any better though

I still had some negative equity in the lease so I had to juggle the trade in and the new car price to cover it.

astro

Cool! Something for me to consider trading in my RX8 early. New for old sounds good to me.

et381

Is that finance through the dealer?

skc

It is dealer finance however, I they cannot offer me the 2.99% interest as they will end up loosing money on the deal.

The 2.99% finance offer only works if buyers pay full price. This is because the dealer gets finance at normal rates and pay the difference on your behalf. So it is a gimmick to attract more buyers.

skc

timbo

So how does this work? The trade-in covers your balloon (any left over? ) and they just extend your existing lease term by, say, 30mths at the same rate. Or do they write a new lease? And how is your accountant going to handle the trade-in if it's above the residual?

I've been offered a similar deal but it bears some close examination, especially if there is any tinkering with residuals that affect your tax position. Mazda dealers don't seem too bad on this, but I can tell you from some experience that when I leased a Range Rover, it became quite difficult not lease another one...as their dealers were the only ones that would readily trade in at or above the residual. Mercedes have been doing it for years.

Still, having said all that, what else would you buy?

skc

The inflated trade in price was to cover my payout figure on my last finance(hire purchase). Therefore, there will be no residual. The new car will go onto a new lease over 5 yrs with a balloon payment.

My accountant was OK with the idea of trading in as he agreed that I will be able to claim better write off as it is at its greatest over the first 2 years. It is also benefitial on my part as the business will own the car this time allowing GST claim on payments. However, he said I will fall into the trap of changing over every 2 years and never actually owning a car.

skc

skc

I will check out the car show this weekend. But the RX 8 seems like a good car with abilities in key areas.
To me these are; accomodate passangers, perfomance, look good and perform on the occassional track day.

It is a big ask for a car, some demands are subjective so, if there are alternatives I will consider these.

The only thing that bothers me at the moment is that the family does not enjoy being passangers due to the restricted visibility in the rear seats

skc

mikeyr

Tim,

I'm not an accountant but the way i understand it is that you are CHPing the car vs leasing the mechanics are quite straight forward. You make a capital gain on the sale/trade price if it is above the depreciated residual value. However you then get a deduction for the new asset over the period you own it within the year. You need one to offset the other. You're better off getting a lower trade and a "discount" at the front end.

Eg after 3 years (assume pick up 1/7 and sell 30/6, just to keep it simple) of an initial purchase price of $62k with 22.5% depreciation a year, the book value is $28.9k Also if you had claimed 80% business then you would have recieved a tax deduction over 3 years of $33.2k x 80% or $26.5.

If you get a trade of $45 then you have realised a capital gain of $16.1k of which you have claimed 80%. (~$13k). But of course at this time of year you haven't actually claimed the 3rd year so you book value at June 05 is $37.5k or a capital gain of $7.5k.

With 4 months to go this year, the new car will achieve a depreciation of $62 x 4/12 months x 22.5% or $4.6k.

Meaning that there indeed may be a capital gain to pay ie $7.5 - 4.6 x 80%usage or $2.3k

But it all depends of the treatment of gst, date of purchase and if the accountant has fully depreciated each year.

Pretty safe to assume however that you would get no real deduction in financial year 06'.

Of course if you're leasing , I'm buggered if i know!!!!

and the back of my envelope is full!

timbo

Thanks Mikey

Yeah, I'm a lease bunny, so it can get a bit complex. I just do what my accountant says works...after he's given me the "really, you'd be far better off buying an old car" lecture (he's a classic Alfa buff, silly bugger )

I figure cars are a pure cost item, and you should structure your use of them to maximise the deductibility of that cost while still driving something you like, and which is reliable (he hates that argument )

mikeyr

I've always been a CHP'r, cause i liked to turn over every few years, so constantly getting a good depreciation and the lump once a year which tended to get spent as a lump (mortgage) rather than evaporating.

I own this one. Very odd!

Revolver

Own mine too...never done enough circuit work to make it tax effective to lease.

We own both cars for that reason (albeit using $$$ out of mortgage equity - usually cheaper money cost than other forms of loan).

skc

As part of my due diligence on the upgrade. I test drove a new BMW 325i with 160 kw power. It is not as quick and nor does it handle as well as the RX 8 but it feels very comfortable and reasonably quick.

The price on the road comes to $83 000 but due to discounts my repayments only goes up by $125 per month

The attractive part for me is the ability to seat passangers with comfort.

Unfortunately I cannot track the car so I loose out here.

skc

xxup

Let's face it - that sounds like it was the ONLY attractive part of the car...

Off you go - get the new RX-8.. I know that your partner likes the car - don't be miserable for the sake of two teenage daughters...

Revolver

Teenage daughters huh? Sure it's the car they don't like...or just having to ride anywhere with their parents?!

mikeyr

They start early, trust me at 11 & 7 they know that it's probably a Bunning's run!! Or worse...Woolies!!!

And SKC 325....no.....it's sort of, "close, but no cigar". 330! if you're going to do it.

skc

I have one daughter who is 14 and a 12yo son.

After all this shopping around the family is happy to stick with the RX 8.

Mike, the 330 would be nice but the budget would be blown out of the water. We are about to launch into building a new family home and I dont think going over budget on a new car would be a good idea especially once you start optioning up on items in the new house the $$$ start mounting up.

skc

mikeyr

I feel you! Just bought in Sudney (LOL) and the stamp duty was exactly half the price i paid for my very first house in Perth....ahh that takes me back!

330 is spensive, my brother had a Ci, great car, stupidly large doors however.

Good call on the 8 by the way, best of luck with the house. See ya in Oct I guess.

xxup

OOpppppppzzzzz sorry