Update: The luxury car tax threshold has been bumped again for the 2021-22 financial year.

'Fuel-efficient' vehicles in the Australian Taxation Office's (ATO) eyes are vehicles that consume less than seven litres of fuel per 100km.

This represents the first time in five financial years the threshold has been bumped for such vehicles.

For any vehicles with remaining values over these thresholds, there is an applicable tax of 33% and was originally designed to make locally-produced cars more attractive to buy.

In the market for a new car? The table below features green car loans with some of the lowest fixed interest rates for fuel-efficient vehicles on the market.

Update resultsUpdate
LenderCar LoanInterest Rate Comparison Rate* Monthly Repayment Interest Type Vehicle Type Maximum Vehicle Age Ongoing Fee Upfront Fee Total Repayment Early Repayment Instant Approval Online Application TagsFeaturesLinkCompare
6.49% p.a.
7.61% p.a.
$587
Fixed
New
1 year
$8
$400
$35,211
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5.99% p.a.
7.20% p.a.
$580
Fixed
New, Used
7 years
$12
$250
$34,791
5.99% p.a.
5.99% p.a.
$580
Variable
New
No Max
$0
$0
$34,791
6.19% p.a.
6.54% p.a.
$583
Variable
New
No Max
$0
$250
$34,958
6.25% p.a.
6.52% p.a.
$583
Fixed
New, Used
3 years
$0
$195
$35,009
Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of . View disclaimer.

In February, when Holden ceased rolling out vehicles altogether, there were calls to scrap the tax entirely.

Nationals senator Matt Canavan said at the time the tax unfairly targets farmers and small business owners.

“Many farmers have to buy vehicles that are above that threshold to operate their business,” Senator Canavan told the Nine Network.

“That sort of cost on our farms particularly when facing a drought, that’s something that should be looked at first in my view.”

Read: What is the luxury car tax (LCT)?

The Federal Chamber of Automotive Industries' (FCAI) chief Tony Weber has previously said the tax is "money grabbing at its worst".

“The LCT actually penalises Australian consumers as it imposes unnecessary additional taxes on many vehicles which can in no way be described as luxury," he said in May 2019.

"The majority of people who pay the tax are average Australians who buy vehicles well under $100,000 to transport their families.

“The EU regards it as a false tariff and there is no doubt that it is a tax on technology and safety, preventing consumers from accessing the newest and safest vehicles."

In 2019, Car Advice found Toyota customers paid the most LCT compared to customers of other brands.

When looking at the 2020 Toyota Landcruiser GX manual utility, for example, the price guide is $68,590 (before on-road costs such as stamp duty and the LCT).

As the vehicle is now within the threshold, there is no LCT applicable, potentially saving buyers up to $351. 

Photo by Hunter Newton on Unsplash





Disclaimers

Savings.com.au does not provide tax advice. This material has been prepared by Savings.com.au and is for informational purposes only, and is not intended to provide, and should not be relied on for tax advice.

For tax advice relevant to you, visit the ATO or consult an independent tax advisor.

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