Small businesses and sole traders can expect a deluge of car advertisements urging them to take advantage of $20,000 tax benefits made available by the federal budget, a major auto retailer says.
And the instant tax deduction may be a booster for the used car market, with vehicles that fall under the $20,000 cutoff point for claimable assets likely to be second-hand.
Martin Ward, managing director of automotive retail group AP Eagers, said anyone with an ABN or a small business would be able to buy a vehicle for under $20,000 and his understanding is that includes second-hand cars.
AP Eagers is an ASX-listed company that operates new and used car and truck dealerships around the country.
"The majority of our used cars are $18,000 to $20,000," Mr Ward said.
"We sold 19,000 used vehicles last year."
Treasurer Joe Hockey mentioned cars and vans in his budget night speech as potential purchases.
Few new light commercial vehicles are under $20,000 but Mr Ward said tradies may instead buy "cab-chassis" utes - vehicles sold without the rear carrying tray - to get under the cutoff.
"Having said that a lot of tradies these days have Ford Rangers that are $45,000 to $60,000 - I'm not suggesting this is going to suit everybody."
Tax Institute counsel Thilini Wickramasuriya said the new measure could apply to second-hand cars if the government uses the definition for depreciating assets that is currently in tax rules.
Mr Ward said vehicle retailers are expecting a significant boost from the new measure and he expected dealerships around the country were working out deals to offer to buyers before the end of the financial year.
"The market will be flooded with TV advertising between June 1 and June 30 with every possible angle on this," he said.
"The car industry is very good at grabbing hold of any opportunity it is given."
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