Should You Lease or Own Your Car?

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 reckon 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 reckon of it as a business buy! But, your car is very vital 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 buy 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 buy or lease a car is an vital choice. Before making any buy or entering a lease agreement, be sure to consult with a trusted accountant to help you make the best choice. (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!)