Should You Lease or Own Your Car?
Aug 4, 2008 Agent Life
Recently my husband and I were looking at a new vehicle for his business. We were presented with 2 options: Buy the vehicle or we could lease it.
We were mulling over the tax benefits of either choice when it dawned on me that many real estate agents probably don’t realize the different benefits when buying a car either. (I never had to think about it, as I owned my car before starting the business and still own it!)
Many agents probably do not even give a second thought about the different options to getting a new car, many probably do not even think of it as a business purchase! However, your car is very important in your business, and when getting a new car you can take advantage of various tax deductions.
Here is the major difference between owning and leasing your business vehicle:
Owning means you can only deduct the interest from the purchase if you finance it. The principle is not deductible. You will also have to calculate depreciation when doing your taxes.
When leasing, the entire lease payment can be deductible. (Assuming the vehicle is used primarily for business purposes).
If you’ve been looking for more ways to take deductions as a real estate agent, deciding to purchase or lease a car is an important decision. Before making any purchase or entering a lease agreement, be sure to consult with a trusted accountant to help you make the best decision. (Hey, you wouldn’t want someone to sell a house without a professional - using the services of a tax professional can be beneficial as well!)
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Tags: business tax deduction, lease or own your car, real estate agent tax deductions
DAILYPRESS by
August 4th, 2008 at 3:27 pm
Is it harder to do all paper work when you lease?
August 5th, 2008 at 12:43 am
There’s paperwork no matter which you do
August 5th, 2008 at 5:16 pm
For many years we leased our cars but 4 years ago I bought two cars, one on a 4 year loan that has now been paid off and another on a 5. Yeah the payments were bigger but damn, what a great feeling to have it paid off and one almost paid off. I think this only works with good quality cars that will last a long time and that you are willing to drive a long time though.
August 7th, 2008 at 2:08 pm
Buying a car these days is no longer worthwhile due to the price of gas.
August 7th, 2008 at 2:29 pm
True, sometimes it seems a bicycle may be a better choice!
August 8th, 2008 at 12:15 pm
Yeah! very true. That’s why we are thinking of buying bicycle because of higher price of Gas.
August 14th, 2008 at 8:42 am
I have just started leasing for the first time and card dealers are offing sick deals on Suv. Brand new Nissan Pathfinder for $210 a month. Never owned a new car.
August 14th, 2008 at 7:15 pm
I am looking for a new car to replace my current one, and have been looking into the lease swap websites. It seems like a decent way to you, you don’t have to hand over the $4,000 or what ever at the beginning of the lease, you just make the monthly payments until the end. Looking for a Caddy CTS
August 14th, 2008 at 9:35 pm
Yeah, cars are pretty cheap these days
It is actually cheaper to buy a gas guzzling suv & the gas for it than a hybrid! A lease swap sounds interesting - never tried that before!
August 19th, 2008 at 4:40 pm
I agree that it is not convinient to buy cars these days because of the gas price is getting higher everyday. Take a bicycle, no pollution and a good exercise.