Before you buy a motor vehicle for your business, think about under what name you should buy the car. If you are a sole trader, you can buy your car in your personal name and claim business use portion of the running costs. If you are registered for GST, you can claim the business use portion of the GST.
However, you need to maintain a logbook for 12 weeks which gives you a better tax outcome, or you can use cents per Kilometre method where you can claim a maximum of 5000 kms.
If you are buying a motor vehicle under the name of your Company, you can claim 100 % of the running costs, depreciation and other related expenses such as interest and borrowing cost over a period. If the car is available to the employee of the company for private use, this may give rise to Fringe Benefit tax.
If you are purchasing a vehicle (less than 1 tonne carrying capacity) over the car cost limit, your tax deduction is capped at this value. You can only claim GST on the capped amount. The maximum depreciation you can claim is also capped at car cost limit value. This cap does not apply to commercial motor vehicles with a carrying capacity of 1 tonne or more, such as a ute, and motor vehicle which has passenger capacity of more than 8 people.
Since buying a motor vehicle for business could involve such complexities, it is recommended that you talk to your accountant first.