Leasing vs purchasing?

[Nitemeister]

Hey all

was wondering if anyone with a small business has any advice regarding leasing vs buying. Am thinking of leasing the 2011 Kia Sportage beginning next year (and selling of the 3, *sob*) and have been reading a LOT online but there seems to be a 50/50 split between both camps, with some saying ASSUMING a least would be the best bet

thoughts?

V

[M Speed]

For me, I would lease. Even if you have the money, why not invest into the company? Lease can be a tax write-off. I am sure you can do it with buying too but again you are holding your capital.

[tonyzoomzoom]

I agree w M Speed - for business, leasing is the way to go.

[Golddragoner]

I also agree. You can write off a lease as an expense for a small business, something you can't do if you finance it. In the end, the lease would be saving you taxes at the end of the year while the financing wouldn't save you anything.

[rancid]

I also agree. You can write off a lease as an expense for a small business, something you can't do if you finance it. In the end, the lease would be saving you taxes at the end of the year while the financing wouldn't save you anything.

You can write off your car for a small business regardless of leasing or purchasing.  Either way, it's an expense for the business.  There's a spot on one of the income tax forms for it.  either way, you can still claim in at the end of the year to save on your taxes.  The expenses (lease or purchase) just goes against the income you've earned during the year.  

To the original poster, it really depends on if you want to switch out the cars or not after X period of time.  Most businesses lease their cars as they are specifically for their business and need to change cars to keep up with the trends, technology, etc.  If you are leasing for personal and business use, I would suggest asking yourself how much of it would be business vs personal.  If the majority is personal, would you want to lease for a buy out later or get another vehicle or just own the car through financing.  Either of your choices you can claim on your income tax.  Don't forget that you can also claim your mileage, services, and other costs incurred while running your business.  Me personally, I don't like to keep moving money away from my business, I'd rather own and keep the money close and tight.  But that's just personal preference and also depends on the type of business you are in and also in what direction you want to take it.  

[Tim25]

Personally I would talk to an accountant, let them go over the numbers and give you some options.

     TIM

[Golddragoner]

I also agree. You can write off a lease as an expense for a small business, something you can't do if you finance it. In the end, the lease would be saving you taxes at the end of the year while the financing wouldn't save you anything.

You can write off your car for a small business regardless of leasing or purchasing.  Either way, it's an expense for the business.  There's a spot on one of the income tax forms for it.  either way, you can still claim in at the end of the year to save on your taxes.  The expenses (lease or purchase) just goes against the income you've earned during the year. 

To the original poster, it really depends on if you want to switch out the cars or not after X period of time.  Most businesses lease their cars as they are specifically for their business and need to change cars to keep up with the trends, technology, etc.  If you are leasing for personal and business use, I would suggest asking yourself how much of it would be business vs personal.  If the majority is personal, would you want to lease for a buy out later or get another vehicle or just own the car through financing.  Either of your choices you can claim on your income tax.  Don't forget that you can also claim your mileage, services, and other costs incurred while running your business.  Me personally, I don't like to keep moving money away from my business, I'd rather own and keep the money close and tight.  But that's just personal preference and also depends on the type of business you are in and also in what direction you want to take it. 

Oh really? can't you only write off a certain amount though which is why a lot of businesses choose to lease (leases generally cost less)?

[oracle]

I also agree. You can write off a lease as an expense for a small business, something you can't do if you finance it. In the end, the lease would be saving you taxes at the end of the year while the financing wouldn't save you anything.

You can write off your car for a small business regardless of leasing or purchasing.  Either way, it's an expense for the business.  There's a spot on one of the income tax forms for it.  either way, you can still claim in at the end of the year to save on your taxes.  The expenses (lease or purchase) just goes against the income you've earned during the year. 

To the original poster, it really depends on if you want to switch out the cars or not after X period of time.  Most businesses lease their cars as they are specifically for their business and need to change cars to keep up with the trends, technology, etc.  If you are leasing for personal and business use, I would suggest asking yourself how much of it would be business vs personal.  If the majority is personal, would you want to lease for a buy out later or get another vehicle or just own the car through financing.  Either of your choices you can claim on your income tax.  Don't forget that you can also claim your mileage, services, and other costs incurred while running your business.  Me personally, I don't like to keep moving money away from my business, I'd rather own and keep the money close and tight.  But that's just personal preference and also depends on the type of business you are in and also in what direction you want to take it. 

Oh really? can't you only write off a certain amount though which is why a lot of businesses choose to lease (leases generally cost less)?

leases only cost less over a certain term in some cases. lol. if you were to run out your lease and buy it out, depending on what the lease vs. finance rates are, you could end up paying more.

you can write off a greater portion of your lease for taxes, but if you make good money, it may not be worth it to claim.

if you are looking to be in a new car every 2-4 years, than leasing is better, less hassle, less initial investment, but if you are going to keep it, finance it.

most manufacturers have great finance rates right now too. like mitsu has 0% up to 72mths.

its def worth while to ask an accountant when you have your choice finalized with both the lease rate % and finance %.

[Keiichi]

I write off my finance payments and maintenance of my car.

[rancid]

I also agree. You can write off a lease as an expense for a small business, something you can't do if you finance it. In the end, the lease would be saving you taxes at the end of the year while the financing wouldn't save you anything.

You can write off your car for a small business regardless of leasing or purchasing.  Either way, it's an expense for the business.  There's a spot on one of the income tax forms for it.  either way, you can still claim in at the end of the year to save on your taxes.  The expenses (lease or purchase) just goes against the income you've earned during the year. 

To the original poster, it really depends on if you want to switch out the cars or not after X period of time.  Most businesses lease their cars as they are specifically for their business and need to change cars to keep up with the trends, technology, etc.  If you are leasing for personal and business use, I would suggest asking yourself how much of it would be business vs personal.  If the majority is personal, would you want to lease for a buy out later or get another vehicle or just own the car through financing.  Either of your choices you can claim on your income tax.  Don't forget that you can also claim your mileage, services, and other costs incurred while running your business.  Me personally, I don't like to keep moving money away from my business, I'd rather own and keep the money close and tight.  But that's just personal preference and also depends on the type of business you are in and also in what direction you want to take it. 

Oh really? can't you only write off a certain amount though which is why a lot of businesses choose to lease (leases generally cost less)?

For both options, you can write off certain amounts.  Amounts that pertain to your business.  So it's a good idea to sit down to see what you want the car for and to see how much would be for personal vs business.  Leasing and buying both have it's strengths and as a business owner, you would need to sit down and crunch some numbers.  For me, it's not worth it to lease as I don't use it that much for business.  It makes more sense for me to buy my cars. 

With an accountant, I'd call and get some estimates before going right in for an appointment.  They vary in cost depending on their level of training and certification.