Rates are on the rise, confidence is up, and for the first time in 16 months new car sales have increased. According to the Reserve Bank's Glenn Stevens, the global economy has resumed growth. Meeting on Melbourne Cup Day, the Reserve Bank Board backed the continued growth and recovery of our economy and further increased the cash rate to 3.5 per cent.
The Federal Government's Temporary Investment Allowance tax breaks have had a noticeable effect on the asset investment plans of our business customers, encouraging investment in the short term to take advantage of the one-off additional tax breaks on offer.
Businesses turning over less than $2 million annually can still make investments in eligible assets with a minimum cost of $1,000 (excluding GST) before 31 December 2009 for an additional 50 per cent tax deduction. This deduction is separate from the depreciation that would usually be claimed over the life of the asset. New (and demonstrator) cars are among the new, tangible, depreciating assets that are eligible.
Larger businesses can also still take advantage of an additional tax break. An additional 10 per cent tax deduction applies to the same new, tangible, depreciating assets but requires a minimum spend of $10,000 (excluding GST). Eligible assets purchased by small and larger businesses ahead of the 31 December 2009 deadline must be installed and ready for use by the end of 2010 to qualify for the additional deductions.
Find out more and help your business to take advantage of the Temporary Investment Allowance. Read our article on the additional business tax breaks still available or find answers with our Temporary Investment Allowance FAQs.
The most recent Roy Morgan Automotive Leading Indicators Report (September 2009) confirms what the industry already knows: consumer confidence is up, with the number of Australians intending to buy a new car in the next 12 months increasing for the second month in a row. For the first time in 16 months, the official VFACTS data released by the Federal Chamber of Automotive Industries (FCAI) shows an increase in car sales compared to the same month of the previous year.
As we noted in our last forecast, car buyers should be prepared for prices to firm due to renewed consumer confidence. Buyers should also be prepared for vehicle supply delays with the close of the Temporary Investment Allowance compounding the normal supply pressure of pre-Christmas car shopping.
We have already seen a significant increase in activity and expect pressure on lenders to easily exceed end-of-financial-year levels. With this in mind, buyers would be wise to arrange their finance pre-approval now, ensuring quick and convenient final approval and settlement once they have found the right car. You can get started immediately with an online finance approval.
For hassle-free car buying, consider a stratton car shopper to track down your chosen car. Simply tell us what you're after (right down to your preferred colours) and we'll do the rest. Send a quick online car finance enquiry now to get your search started.
Find out more about equipment finance and car finance so that your business can benefit from the current tax breaks - only available until 31 December 2009. For personal and business finance, get a quick online car finance quote or secure a car finance pre-approval online.
For more information on finance or insurance, or assistance finding your chosen vehicle, call us on 1300 STRATTON (1300 787 288) or contact your Finance Consultant directly.