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Rideshare in Australia: should you own or lease your car?

General information only. Not tax or financial advice. Consult a registered tax agent or BAS agent for your specific situation.

Most people start rideshare with a car they already own.

That is almost always the right call.

But if you're considering buying or leasing specifically for rideshare, the decision matters more than most drivers realise. Get it wrong and you're carrying a cost structure that works against you before you've taken a single trip.

The two paths

Owning your vehicle

Pros

+Full control over the car
+No fixed weekly rental obligation
+Access to depreciation and running cost claims under the logbook method
+Long-term value if you choose the right vehicle

Cons

−All depreciation risk sits with you
−Upfront capital required
−Maintenance is entirely your responsibility

Best for: Drivers who already own a suitable car, or those committing to rideshare for 12 months or more.

Leasing or renting

Pros

+Predictable weekly cost
+No resale risk
+Some arrangements include servicing

Cons

−Higher total cost over time in most cases
−Less flexibility to exit
−No depreciation claim. You don't own the asset, so you cannot claim its decline in value.

Best for: Drivers testing rideshare short-term, or those who cannot access upfront capital.

If you already own a car that meets platform requirements, that is almost always your best starting point. Run it properly. Track your numbers. Then decide.

What owning actually means for your tax position

When you own your vehicle and use it for rideshare, the ATO allows you to claim the business-use portion of your running costs, and the decline in value of the vehicle itself.

Under the logbook method, your claimable costs include:

—Petrol, based on your business-use percentage
—Servicing and repairs, based on your business-use percentage
—Insurance and registration, based on your business-use percentage
—Depreciation, the decline in value of the vehicle each year, based on your business-use percentage
—Loan interest: if you financed the purchase, the interest component is deductible based on your business-use percentage

If you are registered for GST, you may also be able to claim a GST credit on the purchase price of the vehicle, up to one-eleventh of the ATO car cost limit. For 2025–26 this is $6,334. Speak with a registered tax agent or BAS agent about how this applies to your specific situation.

All of these claims require a valid logbook establishing your business-use percentage. Without one, you cannot use the logbook method at all, and your claims are significantly reduced. Start your logbook on day one.

What leasing means for your tax position

When you lease or rent a vehicle for rideshare, the tax treatment is different.

You cannot claim depreciation. You do not own the asset.

What you can claim is the business-use portion of your lease or rental payments as a business expense. GST credits may apply on each payment depending on your arrangement.

There are several types of lease structures in Australia. The most relevant for rideshare drivers operating as sole traders are:

—Operating lease: You make regular payments for use of the vehicle and return it at the end. Payments are deductible as a business expense. No depreciation claim. No residual payment.
—Finance lease: Similar to a loan. You have use of the vehicle with a balloon payment at the end. Depreciation may or may not apply depending on the structure. Speak with a tax agent before entering a finance lease.
—Novated lease: This is a salary packaging arrangement for employees. As a rideshare driver operating as a sole trader, you are not an employee and generally cannot access a novated lease through a rideshare platform.

Lease structures vary significantly and the tax treatment depends on the specific arrangement. Always confirm with a registered tax agent or BAS agent before signing any lease agreement.

The long-term cost reality

Leasing feels cheaper because the weekly number is visible and manageable.

Owning feels more expensive because the depreciation cost is invisible. You only see it when you sell.

In reality, over a two to three year period, ownership of a well-chosen vehicle almost always comes out ahead on total cost. The key word is well-chosen. A poorly chosen vehicle, one that depreciates fast, costs a lot to run, or breaks down frequently, can make leasing look attractive by comparison.

This is why the vehicle choice itself matters as much as the ownership structure. Article 4b covers that decision in detail.

The one thing that changes everything

Whether you own or lease, your logbook is what determines how much of your vehicle costs you can actually claim.

—Own without a logbook: you're limited to the cents-per-kilometre method, capped at 5,000 kilometres. Your depreciation claim disappears entirely.
—Own with a logbook: you can claim the business-use percentage of every running cost, plus depreciation.
—Lease without a logbook: your ability to claim the business-use portion of payments is limited.
—Lease with a logbook: you can substantiate your business-use percentage and claim accordingly.

The logbook is not optional. It is the foundation of every vehicle-related claim you make. Article 5 in this series covers the logbook in full.

The honest summary

If you already own a suitable car, start there. It is almost certainly your best option.

If you are buying, the vehicle choice matters enormously. Read Article 4b before you decide.

If you are leasing, understand exactly what you can and cannot claim, and confirm the structure with a registered tax agent before you sign anything.

Whatever you do, start your logbook on day one.

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Previous in series · 3

Why most rideshare drivers don't make what they think they make

Next in series · 4b

Choosing the right car for rideshare in Australia

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