Traditionally, the rush to spend in June is the result of businesses either having excess cash - which can produce the double benefits of having a new vehicle and consequent tax breaks - or the need to reduce tax liability.

But the bottom line is this: the most appropriate tax arrangements for your business should be in place already, says Andrew Ashbury of CPA Australia. "You need longer-term planning than buying a car at the last moment in June," he says. "It's better to put things in place during the year and you must totally understand your tax position in relation to the vehicle." Consult an accountant to help decide how best to take advantage of any tax deductions that may be available. Factors affecting this may include the method of financing - hire purchase, lease, cash, and so on. Basically, financing costs may be deductible, purchase price is not.

Secondly, consider what ownership expenses can be deducted or insurance, depreciation for maintenance. But remember, you will be well advised to consider all these specifically in relation to your business.

Tax Office Calculator

The Australian Tax Office has an easy online car expense calculator at www.ato.gov.au (then search for 'car calculator'). It explains the different methods of calculating vehicle expenses and Fringe Benefits Tax and will help you compare which financing method gives you a bigger tax deduction.

CPA Australia's Andrew Albury says one clear tax opportunity for June buyers of new vehicles is to pre-pay all of the coming year's interest before 30 June - interest is tax-deductible. The Tax Office will allow you to bring forward this expense into the current year.

Finally, there are three other good reasons to consider buying a new vehicle before the end of the financial year. Firstly, the savings are usually good and genuine. The vehicle you want may be available at better than normal prices - and remember, car dealers have to meet monthly sales quotas and should always be willing to negotiate.

Secondly, purchasing a new vehicle can be a practical way to reduce operating costs. If your current vehicle has a high odometer reading or is running out of factory warranty, cash outlays for tyres, brakes, battery or worse may be just around the corner. And whenever a work vehicle is off the road for repairs, it's not earning you money.

Thirdly, don't underestimate the productivity benefit of safety and comfort features in a new vehicle. Features previously found only in cars are increasingly being fitted to commercial models, especially vans. A work vehicle, whether car, van, or ute, that protects employees and provides the comfort for them to operate efficiently is surely a good investment.