What are the main methods to claim motor vehicle tax deductions for the 2024-25 year in Australia?

For the 2024-25 income year you can claim motor vehicle deductions using either the cents-per-kilometre method (88 cents per km up to 5,000 km) or the logbook method (keep a 12-week logbook then apply your business use percentage to all car expenses).

Are there any limits or special rules I should know for claiming a car in 2024-25?}

Yes. If the vehicle is a “car” (passenger vehicle under the rules) there is a depreciation cost limit of $69,674 for 2024-25, meaning you can only claim depreciation up to that cost for that year. Also, if your vehicle is primarily for load-carrying (like a ute with >1 tonne payload) it may be exempt from the limit.

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How to Claim Motor Vehicle Expenses in Australia: 2024–25 Guide by Trinity Accounting Practice

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If you use your car for business or work-related travel in Australia, you may be eligible to claim motor vehicle expenses on your tax return. For the 2024–25 financial year, the ATO allows two main methods: Cents per Kilometre and Logbook Method.

At Trinity Accounting Practice, we help you choose the best method that maximises your deduction and ensures compliance with current ATO rules.

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Cents per Kilometre Method

This method is simple and convenient, ideal for those with lower business use.

Key details:

💰 Rate: 88 cents per kilometre for 2024–25
🚗 Maximum: Up to 5,000 business kilometres per vehicle per year
📋 Logbook not required: But you must show a reasonable basis for your calculation (e.g. diary, rosters, client visits)
✅ Covers all car running costs: Fuel, registration, insurance, servicing, and depreciation — no receipts required

💡 Best suited for: Employees or sole traders who occasionally use their car for work and want a quick, no-fuss way to claim.

Logbook Method

This method is more detailed but offers higher tax deductions if your business use is significant.

You must:

Keep a valid logbook for 12 continuous weeks (record date, purpose, odometer start/end, kilometres travelled)
Retain all car-related receipts (fuel, insurance, repairs, servicing, etc.)
Calculate your business-use percentage and apply it to total car costs

📌 You can claim:

Fuel & oil
Registration & insurance
Lease payments or interest on car loans
Repairs, servicing, tyres
Depreciation (limited — see below)

💡 Best suited for: Sole traders, business owners, and contractors with high work-related car usage.

Car Depreciation Limit for 2024–25

If you own the car, you may claim depreciation. However, the ATO caps this based on luxury car limits.

🚫 Depreciation cost limit: $69,674 (for cars used from 1 July 2024)
🚫 Maximum GST claim: 1/11th of the cap = approximately $6,334

If your car costs more than the limit, you can only claim up to the cap, not the full price.

Exempt Vehicles – No Depreciation Cap

Some vehicles are exempt from the depreciation cost limit. These include:

Heavy vehicles like trucks, vans, or utes with a payload over 1 tonne
Buses designed to carry 9 or more passengers
Vehicles designed primarily to carry loads, not passengers

💡 Many tradies and contractors who drive dual cabs or commercial vans may fall into this category — Trinity Accounting Practice can assess this for you.

Choosing the Right Method with Trinity Accounting Practice

Making the right choice can significantly reduce your taxable income.

At Trinity Accounting Practice, we:

Help you determine the best method for your business
Ensure your records are ATO-compliant
Maximise your vehicle expense deductions
Provide advice tailored to sole traders, contractors, company directors, and business owners

📍 Located at 159 Stoney Creek Road Beverly Hills NSW 2209, we offer expert advice and personalised service.
📅 Weekend & after-hours appointments available!
☎️ 02 9543 6804
🌐 www.trinitygroup.com.au
📅 Booking Link: https://calendly.com/ramy-hanna