Edition 1, 2007 - Stamp Duty Relief... For Some
Finance Focus #1 2007
Stamp Duty Relief
Welcome to the first edition of Finance FOCUS for 2007. We hope you all had a safe Christmas and New Years period, and are starting the new year feeling refreshed and happy.
In this issue: an explanation of some recent changes to stamp duty on finance contracts, and a look back at 2006 vehicle sales. Read on...
Stamp Duty Relief For Some
Good news for borrowers in Victoria, Queensland and Western Australia - your state governments have abolished Government Stamp Duty on vehicle leases and hire purchase agreements from the 1st of January, 2007.
Even better, this change affects both new and existing finance contracts - so if you reside in VIC, QLD or WA and currently have a vehicle financed through a lease or HP your monthly repayment will have gone down on 1/1/07. The exact amount saved depends on several factors, including the type of finance, amount borrowed, term of the loan and which state you live in.
Let's look at an example: Say you live in Victoria and use a hire purchase agreement to borrow $50,000 over 48 months with a 40% residual, resulting in pre-1/1/07 monthly payments of $882.14. As of 1/1/07, the removal of stamp duty (and GST on the stamp duty) will lower this repayment to $874.92 - a saving of $7.22 per month.
Saving a few dollars per month on stamp duty may not look like a big difference on paper, but it adds up to several hundred dollars on over the term of even a small loan. To look at it another way, reducing the monthly payments on our hypothetical loan by $7.72 is the equivalent lowering the interest rate by 0.25%!
This abolishment of vehicle finance stamp duty fulfils a promise made by state governments when the GST was introduced in 2000, and should be applauded. It is a pity, however, that not all of the states have followed suit.
If you live in New South Wales, South Australia, the NT or the ACT we suggest you write to your local member and encourage them to "catch up" with the rest of the country (Tasmania residents, you already had no stamp duty on leases & HPs).
If you have any questions about stamp duty or how these changes may affect you please contact your finance consultant or call our customer service line on 1300 STRATTON (1300 787 288).
What Is Stamp Duty? Stamp duty is a tax levied by state governments on certain documents and transactions, including some finance contracts, the transfer of motor vehicles (from one owner to another) and the hire of goods. Stamp duty rates and types differ from state to state.
Diesel Sales Up 265% At Mercedes-Benz
Sales of diesel-powered cars from the Mercedes-Benz range have more than doubled in 2006 with demand showing no signs of slowing.
Total sales of diesel-powered Mercedes-Benz cars and 4WDs increased 265% in 2006 (November YTD), up from 686 units in 2005 to 1,823 in 2006. As a percentage of total Mercedes-Benz passenger car sales, diesel-powered units now account for an impressive 14 percent, compared to six percent at the end of 2005.
This is largely due to the updated ML series 4WD being released in 2006, which includes an optional modern diesel power plant.
Many manufacturers are also experiencing similar sales increases for non-petrol-powered vehicles, including diesels, hybrids and LPG vehicles.
In the "passenger private" sector for 2006, diesel sales were up 99.30%, hybrid sales up 91.70% and LPG sales up 139.00%, while sales of petrol powered vehicles were down 1.80%.
If you would like an instant finance quote for any new or used car - petrol, diesel, LPG or hybrid - you can get an online quote at our website, call your finance consultant, or call our customer service line on 1300 STRATTON (1300 787 288).
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
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