While many people may think leasing a car is only an option for the elite, the majority of vehicles that are leased are used by average income earning Australians.
In proposed changes announced this week, the existing FBT statutory calculation system will be scrapped, meaning these average Aussie workers will be the biggest losers under Rudd’s plan.
This also contradicts Deputy Prime Minister Anthony Albanese’s suggestions that the change will affect mostly BMW drivers, not the average Holden Commodore driver.
FinCar, a Sydney based vehicle financing and brokering company, has been receiving a steady stream of calls from worried customers since the change was announced.
“I’d love to know where the government got their figures,” says Managing Director Mark Ellis.
“This change is going to have the most detrimental effect on Joe Average, those living further out west who commute into the city.”
FinCar’s average novated lease customer is earning less than $80,000 a year and driving a car worth about $35,000. These people will be worse off by thousands of dollars.
When asked about potential benefits of the changes, Ellis compared a customer choosing between purchasing a Commodore or a Mercedes. “The new system only takes into account the annual running cost of a vehicle, including depreciation, which means the person driving the Merc will benefit more than the Commodore driver.”
Ellis suggests that the government should allow the kilometres that people have to drive to and from work be included as ‘business usage’ as these people have little or no other travel options due to poor infrastrucutre, “This will give the people in the west more of a fair go.”
The current uncertainty around these changes is also immense with an estimated 8,500 car orders put ‘on hold’ while consumers seek more clarity about the financial impact of the proposed changes.
Australian consumer finance website MoneyBuddy.com.au has reported a significant spike in traffic related to FBT and novated leases.
MoneyBuddy CEO Luke Howes says “These changes have really hit a nerve with Australian consumers. This week we’ve had a 1000% increase in website visits from people looking FBT information.” Howes continues, "The most unfortunate aspect to the governmetn announcements is the human cost. The lack of clarity and the uncertainty has meant people have already lost their jobs at NLC and Selectus. Car dealerships are being inundated with cancelled orders.Individuals and businesses are suffering."
MoneyBuddy is one of the leading personal financial information and comparison websites in Australia. Financial decisions are an important part of life and MoneyBuddy helps people make those decisions with greater confidence. MoneyBuddy displays hundreds of financial rates and products including personal loans, home loans, credit cards, car loans and other finance products.