Lease or buy car?


H

hlt

I wanted to know if it is more advantageous to lease or buy a car, taxwise?
My husband started working for himself this year and is probably going to
buy a car in 2005.

What can we claim? Interest on the loan? costs or mileage? depreciation?
Most of this I know but I'm still not sure what's the best way. If he gets
his business name on the car is that better? What if we don't get a loan
and have no interest? Blah, blah, blah - you get the idea I'm sure.

Thanks.
 
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A

Amy Gray

I wanted to know if it is more advantageous to lease or buy a car, taxwise?
My husband started working for himself this year and is probably going to
buy a car in 2005.

What can we claim? Interest on the loan? costs or mileage? depreciation?
Most of this I know but I'm still not sure what's the best way. If he gets
his business name on the car is that better? What if we don't get a loan
and have no interest? Blah, blah, blah - you get the idea I'm sure.

Thanks.
Ignoring taxes I would point out it is always MORE expensive to lease
a car than it is to buy the same car.

It should be noted you first should negotiate to buy the car, then you
you nogotiate the lease.

Personally I stay away from leases. My last car was a late model
used that I bought from a local dealer where they have no bottom
line pricing.

Also with the price of oil now it gets good gas mileage.
 
B

Bob

Amy Gray said:
Ignoring taxes I would point out it is always MORE expensive to lease
a car than it is to buy the same car.

It should be noted you first should negotiate to buy the car, then you
you nogotiate the lease.

Personally I stay away from leases. My last car was a late model
used that I bought from a local dealer where they have no bottom
line pricing.

Also with the price of oil now it gets good gas mileage.
I agree that auto leasing is more expensive than buying. unless you're
into heavy SUV's you should just buy the car and claim the
standard business mileage rate for taxes.
 
B

Bob Williams

This is not true. A proper analysis using discounted cash flow
analysis should be done before making this decision. The additional
interest paid on a lease may be less than the compounded opportunity
cost (other investment returns) lost by paying cash for a car.

Taxes are part of the sum, but they are not all.

Bob Williams
 
K

Ken Russell

Bob is correct.

You need to do NPV study comparing purchase with leasing.

The purchase need not necessarily be a cash deal, there are other options
such as a personal loan or hire-purchase.

Look at all the options and see which gives the best NPV.

--
Ken Russell

(e-mail address removed)
Remove yourhat to reply by e-mail
..
 
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A

Amy Gray

This is not true. A proper analysis using discounted cash flow
analysis should be done before making this decision. The additional
interest paid on a lease may be less than the compounded opportunity
cost (other investment returns) lost by paying cash for a car.
It should be noted though that before you "lease" you negotiate
to "buy" the car.

Look at the lease very carefully, read up on leasing before you sign
anything.

Leasing is only another way to "finance" a car.
 
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G

Gary V. Deutschmann, Sr.

Hi hlt

We have done both, including fleet.

In all cases, ownership offered the best tax breaks and lowest bottom
line cost as well.

Don't forget, business vehicles cannot be used for personal use!

TTUL
Gary
 

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