Edition 4, 2006 - Sizing Up Re-financing, Hybrids, LPG, and Salary Packaging
Finance Focus #4 2006
Hybrids, LPG, and a
Welcome to the latest edition of Finance FOCUS. In this issue we touch on re-financing property loans, analyse LPG conversions, take a look at salary packaging & novated leasing, and examine the environmental implications of the transport policies announced during Victoria's election campaign.
Re-examining Your Mortgage Makes Sense
With interest rates on the move now is an ideal time to re-examine your home loan or investment property loan, and consider re-financing to get a better deal. You may also want to consider fixing all or part of your loan to "insure" against any future rate increases.
Stratton Property Finance can assist you by comparing your current mortgage against the latest loans on offer from over 20 lenders, including banks, building societies and specialist property financiers.
With our help, re-financing your home, investment or commercial property loan is a surprisingly easy and hassle-free process - and by finding a better deal you can
To find our more you can visit the property finance & home loans section of our website or call us on 1300 STRATTON (1300 787 288).
LPG Conversions Need Consideration
The Federal Government's $2000 LPG conversion rebate has caused a flood of business in the LPG conversion industry, despite the fact that the rebate runs until 2014 - so there's no real hurry to get converted.
An in-depth look at the conditions of the rebate, particularly from a business perspective, may slow consumer uptake of the offer. The rebate only applies to vehicles under 3.5 tonnes gross vehicle mass and is aimed at private motorists. It excludes vehicles used for business: this means it also excludes vehicles under salary sacrificing arrangements. There's also a 2.5 cents per litre excise on LPG that will be introduced in 2011 and increased gradually to 12.5 cents per litre by 2015.
The use of LPG will certainly reduce greenhouse emissions but you may want to do your sums before making a decision to convert.
Novated Leasing and Salary Packaging - It's Still a Good Option
The combination of bracket creep and taxation changes have eroded some of the advantages of operating a vehicle under a novated lease, but the basic benefits are still there and are a good option for an employee with access to salary packaging.
A novated lease is a three-way agreement between an employer, employee, and finance company allowing an employee to purchase a car of choice from their pre-tax salary, via their employer.
The employee gains financially as lease payments, running costs and FBT (Fringe Benefits Tax) are paid from pre-tax income. The employer takes on the employee's lease payment for the duration of the lease or until the employee leaves. If employment ceases during the loan term, the obligation of the lease passes to the employee and a new novated lease agreement, on the same vehicle, may be reached between the employee and the new employer.
The employer deducts the lease payment from the gross salary of the employee, allowing the employee to pay for the vehicle in pre-tax dollars - this is what is known as salary packaging.
Salary packaging may be provided by an employer purely for the benefit and private use of the employee or their spouse, thus adding value for the employee without their employer incurring extra wage costs. Salary packaging a vehicle can be an effective way of increasing the value of an employee's take-home pay.
A novated lease agreement allows the employee to choose their own vehicle and enjoy any equity that may accrue: if the vehicle maintains a good resale price the employee will benefit - not the employer.
If you would like more information about salary packaging a vehicle or are an employer interested in offering salary packing to your staff, please visit the salary packaging & novated leasing section of our website or call us on 1300 STRATTON (1300 787 288)
Transport Policy & the Victorian State Election Campaign
Changing weather patterns have dramatically raised everyone's awareness of climate change and greenhouse issues. Government, industry and individuals are slowly realising that the catalyst for limiting climate change is no longer completely based on economic viability or return on investment.
Reducing greenhouse problems is now simply dependent on how much government, industry and individuals are prepared (or can afford) to spend on limiting greenhouse emissions.
So it's no surprise that the upcoming Victorian State elections have been littered with transport industry promises from both major political parties. However, the promises from both parties come at a time when the Australian car manufacturing industry is facing a downturn after experiencing record sales figures in the past few years.
The Victorian Labor party has offered to ask Toyota to build a Camry hybrid at its Altona plant in Victoria. The offer came with an incentive to hybrid buyers of a $50 reduction in registration fees for hybrids. This announcement was followed by a statement from a Labor spokesperson indicating that the Victorian government would look to increase hybrid numbers in the government fleet if the Camry hybrid appeared on Australian roads.
The Victorian Liberal Party has focused on abolishing some existing charges (parking tax and motorcycle levy) and restoring the pensioner registration rebate. It also promises to keep parking at railway stations a cost-free exercise.
The Australian car manufacturing industry readily states that hybrid production in Australia is not yet viable, which is indicative of the industry's inclination to base its production schedules on economic viability rather include a measure of corporate responsibility in the face of obvious climate change.
Government, industry and the individual voters will eventually come to realise that decisions based solely on economic viability will not reduce greenhouse problems.
Did you know Stratton Finance now offers "Green Finance", a free carbon dioxide emission offset program for all cars that we finance? You can find out more about Green Finance on our website.
For more information on any of our products & services please call us on 1300 STRATTON (1300 787 288), or click on one of the following options:
GENERAL ADVICE WARNING - We must inform you that the information in this e-mail is general advice only and is not specifically based on your own objectives, financial situation or needs. Before you act on this information, you should read any relevent Product Disclosure Statements and consult with a registered tax agent to ensure that this advice is suitable for you.
Stratton Finance Pty Ltd
T: 1300 STRATTON
Stratton Finance - your personal finance broker
© 2006 Stratton Finance Pty Ltd