Question by Ray K: leasing vs buying a car for a small incorporated company? I could easily pay cash for a car and would even consider a late model used one. I do not understand tax, depreciation and that sort of thing. Best answer for leasing vs buying a car for a small incorporated company?:
Answer by Dtownfb
TAlk to your accountant to see if you can "write-off" a lease as a business expense. I know the laws have changed over the years and leasing for business purposes is not as favorable as it used to be. Also leasing has it's headaches as you do have to watch your mileage and maintain the vehicle. Think of leasing as long-term renting. If you buy used (pay cash, of course), you can write off all miles driven for business as a business expense. The allowable amount is $ 0.485 per mile. This cost per mile takes into account fuel, maintenance and depreciation. You should keep a separate ledger detailing your business miles versus your personal miles on the car. My wife does this for her mary kay business.
Answer by rotoette
Well with leasing you would have to worry about going over the millage limit, wear and tear, and all those little things that may add up when the lease is up.
Answer by MI KAY DEAN
well just instead of tax right off's there are other things to look at. how miles are going to be put on this car in a years time. if its quite a few they i would think about leasing instead of buying but talk to your tax consultant to see what he/she thinks would be a wise decisions.
Answer by Ray K
Last year I couldn't come up with enough deductions to file the itemised 1040, even with interest on my house loan. Leasing is throwing away money in hopes that the government MIGHT give it back at the end of the year. There are other hidden costs with a lease also. If i were you, I'd buy. Deduct your operating expenses, but keep track of mileage and split between business and personal if the car is used for both.
Answer by xx_satanic_mechanic_xx
yes, you can do a business lease. The advantage of a business lease is that it allows you to take the total deduction of the purchase price in a single year's taxes. There are other advantages to leasng under a business as well. If you are incorporated and the company is buying the car, it is a lot different from a part-tme career. (No offense to the Mary kay consultant, but this is a wholly different situation). Commercial leases are vastly different from personal leases. Usually there is no mileage penalty on a corporate lease, since it is being driven for business purposes. Usually, a corporate lease is just a modified purchase, allowing a buy-out residual of $ 1 at the end of the term. You would be well-served to make an appointment with an accountant to discuss your options. There is usually some good advice here on buying and selling - and usually I am able to offer a little of it. But in a situation like this - dealign with taxes, government an business, its best left to preofessionals
Answer by dreamraven
Here's an article that would help you understand leasing fees and taxes: http://leaseguide.com/lease09.htm.
It simply doesn't hold true anymore, says Tim Hohl, general manager of Michael Hohl Motor Company in Carson City. The relatively small pool of cars coming off three-year leases or traded in by buyers who made purchases in 2009 and 2010 is one reason. Tight supplies boost used-car prices
There are many things to consider while opting for a new car. One of the biggest challenges being a car buyer in Australia is to decide whether to go for a car lease or to buy a car via car brokers. There are many agencies that provide car buying service as well.
There are basically many significant differences between car leasing and car buying. Listed below are a few of those.
At the end of a car-lease, you return the car to the agency whereas if you are the car buyer you will own it.
If you opt for a loan, it usually is for five to six years whereas a lease term is lesser than that, two to four years.
Payment for loans is higher than the car lease payment.
Car lease normally comes with a limitation of amount of mileage you can use; you will have to negotiate a higher mileage limit if you plan on traveling a great deal. If you go beyond the limit, you will be charged 10 to 15 cents extra whereas if you own a car this is not an issue.
Amount of wear you can cause to a vehicle is limited if you go for car lease. You might have to pay extra if you cause excessive wear. If you are a car buyer, you dont have to worry about this.
Terminating a car lease before the expiry causes you to pay a bit extra, same is the case in case for car buyers as well if you have opted for car loan, you usually have to pay a fee.
Upfront cost for car leasing is lesser than that of car buying.
Before deciding on whether to go for a car lease or to buy your own car, please keep the above points in mind. If you are an Australian resident and want to know more about car buying, car buyers or car lease, please visit www.privatefleet.com.au. Its one of the renowned car buying service providers in Australia and could prove very handy in your decision making.
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