Quick answer
If you want a work vehicle to count in this financial year, it generally needs to be first used or installed ready for use by 30 June — not just ordered or paid for. Most vehicles cost more than the ATO's $20,000 instant asset write-off threshold, so they're depreciated rather than written off, and passenger cars are capped by the car limit. Get finance approved early so delivery isn't delayed.
Key points
- The ATO's test is when the asset is first used or installed ready for use, not when you sign.
- Instant asset write-off: less than $20,000 per asset, aggregated turnover under $10 million.
- Most new work vehicles cost more than the threshold and are depreciated instead.
- Passenger cars are capped by the car limit — $69,674 for 2025–26 and $69,883 for 2026–27.
- Line up finance approval weeks ahead so the vehicle is delivered and in use in time.
Every June, dealer yards fill with “EOFY sale” banners and business owners start wondering whether now is the time to replace the ute. Sometimes it is. But the tax rules around timing are widely misunderstood, and a rushed purchase can leave you with a vehicle you didn’t need and a deduction you can’t claim this year.
This guide explains what actually counts, which tax rules apply to vehicles, and how to time the finance so the vehicle arrives when it needs to.
What does the ATO’s timing test actually say?
For depreciation and the instant asset write-off, the ATO’s test is about when an asset is first used or installed ready for use. That’s not the date you:
- signed the order;
- paid a deposit;
- received finance approval; or
- received the invoice.
It’s the date the vehicle is delivered and in use (or ready to be used) by your business. A ute ordered on 15 June but delivered on 5 July generally belongs to the next income year for these purposes.
This catches people out every year, especially with popular utes and vans that have waiting lists. If timing matters to you, confirm the delivery date in writing before you commit.
Does the instant asset write-off apply to vehicles?
The ATO’s current table shows a threshold of less than $20,000 per asset for businesses with aggregated turnover under $10 million, for assets first used or installed ready for use on or after 1 July 2023. The test applies to each asset individually.
| Vehicle or asset | Likely to fall under the threshold? |
|---|---|
| New ute, van or car | Rarely — most cost more |
| New light truck | No |
| Older second-hand ute or van | Sometimes |
| Box or tandem trailer | Often |
| Separately bought tools and equipment | Often |
| Small fit-out items bought separately | Sometimes |
So for most new work vehicles, the write-off isn’t the relevant rule. The vehicle is depreciated over time instead, which still gives a deduction — just not all at once. See our page on the instant asset write-off for more.
What about the car limit?
If the vehicle is a passenger car — a sedan, hatch, wagon or most SUVs — the car limit caps the cost you can use for depreciation and the GST credit on the purchase:
| Financial year | Car limit | Maximum GST credit |
|---|---|---|
| 2025–26 | $69,674 | $6,334 |
| 2026–27 | $69,883 | $6,353 |
The car limit generally depends on the financial year in which you first use or lease the car, so a car delivered in early July falls under the next year’s figure. Many utes and vans designed mainly to carry goods aren’t passenger vehicles under the rules, so the cap may not apply to them. Read more on the car limit.
How does GST fit in at year end?
If you’re registered for GST and buy from a registered dealer, you can generally claim a GST credit for the business-use share on the BAS covering the purchase — capped for passenger cars at one-eleventh of the car limit. That’s a BAS matter rather than an income tax one, so it isn’t tied to 30 June in the same way. But it does affect cash flow: a June purchase with GST claimed on the June quarter BAS brings the credit back sooner.
There’s no GST credit on a private purchase from someone who isn’t registered. See GST on business vehicles.
Should you buy before 30 June at all?
Ask yourself three honest questions:
- Would you buy this vehicle in August if there were no EOFY? If yes, bringing the purchase forward may make sense. If no, the deduction isn’t a good enough reason.
- Can the business comfortably afford the repayments from its quietest month, not its best?
- Can the vehicle actually be delivered and in use before 30 June? If not, the timing advantage disappears.
If you answer yes to all three, a June purchase can be sensible. If not, there’s nothing wrong with waiting. Dealers run promotions at other times of the year too.
How to time the finance
The most common reason an EOFY purchase misses the deadline isn’t the dealer — it’s finance paperwork arriving late. Here’s a realistic timeline:
| When | What to do |
|---|---|
| 6 weeks before | Decide on the vehicle type and budget; talk to your accountant |
| 5 weeks before | Gather documents; start the finance enquiry |
| 4 weeks before | Get approval in principle; shortlist vehicles |
| 3 weeks before | Choose the vehicle; confirm delivery date in writing |
| 2 weeks before | Final approval with the invoice; arrange insurance |
| 1 week before | Settlement; collect the vehicle and start using it |
June is busy for dealers, lenders and accountants alike. Starting in May is far less stressful than starting on 20 June. Our documents checklist shows exactly what to gather.
Which finance structure suits an EOFY purchase?
Most business buyers use a chattel mortgage, because the business owns the vehicle from day one and can generally claim depreciation and the GST credit as normal. Commercial hire purchase works similarly for tax in many cases. Leases are different: the financier owns the vehicle, so you claim the lease payments rather than depreciation. If you’re buying with tax timing in mind, ask your accountant which structure fits before you choose.
If you’d like to compare the usual options for your vehicle, the business vehicle finance planner gives you a quick view. When you’re ready, you can check what your business could qualify for — it takes about a minute.
Common EOFY mistakes with vehicles
- Assuming signing equals using. It doesn’t. Delivery and use are what count.
- Assuming every ute qualifies for the write-off. The threshold is per asset, and most new utes cost more.
- Forgetting the car limit on passenger cars. The excess over the limit isn’t depreciable.
- Claiming GST on a private purchase. There’s no GST to claim.
- Overstretching for a bigger vehicle “because of the tax”. The deduction doesn’t cover the cost of the vehicle.
- Leaving finance until the last week. Delays push delivery into July.
Illustrative example: two plumbers, two outcomes
Illustrative only. Two plumbers each decide in June to replace their vans.
The first starts in mid-May. She gathers her BAS and bank statements, gets approval in principle in a week, finds a demo van with shelving already fitted, and confirms delivery for 20 June. The van is on the road and in use well before 30 June, and her accountant includes it in that year’s depreciation.
The second starts on 22 June. His preferred van has a three-week wait, his documents take a week to pull together, and the van arrives on 10 July. Nothing is lost — the van still gets depreciated — but the deduction falls into the next income year. He’d have been better off taking his time and choosing the right van without the deadline pressure.
What about trailers and smaller assets?
EOFY is often a good time to buy the smaller items that sit around a vehicle: a trailer, toolboxes, a generator, a pressure washer. These are more likely to be under the $20,000 threshold per asset, and if your business is eligible and they’re in use by 30 June, they may be written off in full for the business-use share. See trailer finance if you need finance for a bigger trailer.
Ready to plan your vehicle purchase?
If the business genuinely needs a vehicle and the timing works, starting the finance early is the single best thing you can do. Start a 60-second enquiry and tell us what you’re buying and when you need it.
There’s no credit check when you first enquire. Your details aren’t fired off to a dozen lenders — one CarsOne specialist handles them and calls you to work through the vehicle, the timing and the structure. Please be accurate about the price, the seller and your delivery deadline, so we can work to your date rather than discover a problem in the last week of June.
Frequently asked questions
If I pay a deposit on 28 June, does the vehicle count for this year?
Not on its own. For depreciation and the instant asset write-off, the ATO looks at when the asset is first used or installed ready for use. A deposit on a vehicle that isn't delivered until July generally falls into the next income year.
Can I write off a new ute before 30 June?
Only if your business is eligible and the ute costs less than the $20,000 threshold, which is rare for new utes. Most are depreciated over time instead. Your accountant can confirm how it applies to your purchase.
Does financing a vehicle change the tax deduction?
How you pay generally doesn't decide eligibility for depreciation or the write-off; the cost, timing and your business's eligibility do. Leases are different because the financier owns the vehicle. Check with your accountant.
Is it worth buying a vehicle just for the tax deduction?
Usually not. A deduction reduces taxable income; it doesn't refund the purchase price. Buy a vehicle because the business needs it, and treat the tax timing as a secondary benefit.
How early should I start the finance process?
Ideally four to six weeks before you need the vehicle, and earlier in June when dealers and lenders are busy. That leaves time for documents, approval and delivery.