For businesses considering new car purchases, now is the time to buy thanks to tax incentives from the Federal Government.

Treasurer Wayne Swan has announced that small businesses can claim a 50 per cent tax deduction for assets costing more than $1,000 purchased from 13 December 2008 until 31 December this year.

This is an increase from the 30 per cent announced earlier this year and extends the period of eligibility by six months.

To qualify for this tax break, a small business must have a turnover of less than $2 million per year.

All other businesses can continue to access the 30 per cent tax break prior to the end of June, before it drops to 10 per cent for the six months to 31 December 2009.

The peak automotive industry body, the Federal Chamber of Automotive Industries (FCAI) has welcomed the increased and extended tax break for small businesses.

"This measure offers an incentive of real value and will encourage small business owners to bring forward purchasing decisions," explained the FCAI's Chief Executive, Andrew McKellar.

"Every plumber, every painter, every electrician - in fact any small business owner - is urged to take full advantage of this offer," Mr McKellar added.

So if you're in the market for a new vehicle and have an ABN number, get shopping for that new car, ute, delivery van or truck.

There is also a $2,000 rebate for private buyers of LPG-converted vehicles.

Mr David Purchase, Executive Director of the Victorian Automobile Chamber of Commerce said: "Australia is virtually self-sufficient in LPG with huge natural reserves and with the Government's commitment to the conversion rebate, LPG remains a viable and attractive alternative option for those who wish to convert to a cheaper alternative fuel."

The bottom line is: for business operators there has never been a better time to buy a new vehicle.

However we recommend businesses consult with their financial advisors as there are implications for GST and also various methods of financing new car purchases and running costs which can provide flow-on benefits into the new financial year. For example - unless for other reasons you wish to pay cash for your new vehicle - financing costs associated with leases and hire purchases may be deductible.

BRAD LEACH