Suppose you have something like:
House 1 - ~$550k value. You live here.
House 2 - ~$575k value. Investment property. Tenanted at $570/week.
Loan 1 - $250k, 3.9% variable P&I, $1500 monthly repayment, fully offset (as in, there's $250k in cash sitting in a bank account against the loan, so zero interest currently accrues against this loan and each repayment currently knocks $1500 off the principal). Secured against House 1. Interest not tax deductible.
Loan 2 - $130k, 4.75% variable interest-only, ~$500 monthly repayment, $30k offset. Secured against House 1. Interest is tax deductible.
Loan 3 - $420k, 3.9% fixed P&I, $2,000 monthly repayment, $10k offset. Secured againt House 2. Interest is tax deductible.
Misc - $150k/year salary, no other debt, good credit.
Vehicle 1 - ~15 years old, purchased in 2010 for $15k or so. ~100k kms on it. Serviceable but a bit rusty (and getting rustier). Has been starting to develop minor issues (shift link cable broke and had to be towed, etc.).
Vehicle 2 - Under consideration for purchase. New, fully-electric. $93k purchase price (including tax, on-roads, delivery, etc.). Other options possible but only if they're fully electric.
The rental income from House 2 (less agent fees and other expenses) fully covers the costs of Loan 3, but nothing beyond that (aside from some tax benefits from depreciation, and being able to claim the interest on Loan 2 and Loan 3 as a deduction).
In this kind of situation, which option makes the most sense:
Draw down the offset account(s) and pay cash for the vehicle? The extra interest that accrues against Loan 2 is tax deductible, and any amount taken from the Loan 1 offset gets a fairly modest 3.9% interest rate.
Pay for it with new debt? Any interest accrued in this case would not be deductible, and the terms of the finance would probably be worse than either Loan 1 or Loan 2 (as far as interest rates and fees go, anyways). But it keeps the vehicle finance separate from the housing finance.
Do neither, and just keep driving (and maintaining) the old car (and hoping it doesn't break down at an inopportune time/place)?