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salary package with an unwanted car

Discussion in 'Accounting & Tax' started by Logan, 8th May, 2016.

  1. Logan

    Logan Well-Known Member

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    A bit off the property topic....

    Sounds like a great problem to have. I am currently negotiating with a new employer who is offering a car as part of the package with a 'lease back agreement'. I have zero interest in the car and the new employer is 5 minutes from my house, the car seems over the top. I have not been offered (nor have I ever sought) a car as part of a package before. Is it possible to just ask for the cash ? how does a 'lease back' car even work ?

    thanks Logan
     
  2. bob shovel

    bob shovel Well-Known Member

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    Do you need a car for your role? Do they know you live so close?
     
  3. Logan

    Logan Well-Known Member

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    I don't really need the car as they have a fleet. Yes they know how close I live. I think the car is to make the job seem more enticing or demonstrate the high level of the role.
     
  4. Logan

    Logan Well-Known Member

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    When I say '5 minutes' I mean 5 minutes on a bicycle
     
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  5. bob shovel

    bob shovel Well-Known Member

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    Ask for the cashola. One workplace i was at you were considered "important" if you had a work car.

    Is it a lease agreement that you pay for? Or they cover all costs?
    What's a car worth these days add a celery package? 15k?
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    If you're not going to be doing the km's then you'll be paying top $ on the fbt. Take the equivalent in super.
     
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  7. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Just a random thought. I'd guess most people going into a new role have no real need for a new car as they would already have viable transport regardless of how far they live from work.
    Unless the employer expects them to present well in a sales job requiring driving and not drive everywhere using an existing old bomb? In which case I would think I'd want the employer to be fully responsible for those car costs.
     
  8. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you have to lease it back, that's a cost to you so I'd say no thanks. I'd ask for the equivalent either in cash, or super, or something that you will actually benefit from.
     
  9. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Question : Will you have any deductible use for the car ?

    I would determine how the employer will cost and charge the car and the FBT consequences (If its not 100% work use there should be some). One of my family had a brand new car as part of his package. Included up to $200 fuel a month and was insured etc. Cost him $200 from his pre-tax income a month. Thats very attractive even if you drive it little.

    Find out more and assess its value v cost.
     
  10. Marg4000

    Marg4000 Well-Known Member

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    Do you need the car during the day to perform your job requirements. If not, it is probably intended as a sweetener.

    Ask for extra cash or super instead.

    If taking the car, find out who "buys" the car. The employer or you?

    Be aware that most work cars require the person to take out a novated lease in their own name. While employed the employer will pay the expenses, but if you leave you may be responsible for the remaining part of the lease expenses.
    Marg
     
  11. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Also bear in mind that novated leases are a serviceability killer, so if you are looking to buy property in the near future speak to your broker first to be sure it's not going to wreck your plans.
     
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  12. Logan

    Logan Well-Known Member

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    Thanks for the replies. I will need to drill them down understand the car situation better.