The dilemma... I had the cutest black on black Mustang convertible, a lease. I loved that little car! Knowing that realtors drive a lot, my husband negotiated an 18,000 mile per year lease. Of course, the additional miles upped the monthly payment considerably. My lease was due to end March 31st, 2011, but due to the impending overage I projected, I turned the car in early. This time, I decided to buy a car. There's no limit on the miles per year, but the payment is higher. I'm not sure which option is better, but I'd be very interested in hearing of your experience with lease v. purchase, and the tax implications of each.
Margo: I have done both... purchase and lease. As of right now, I much prefer to purchase. But, like everything else... it all depends on your situation, and on what is important to you.
Right now I have a 2007 Honda CR-V. Really pretty, Green Tea Metallic is what they call the color. After 39 months, I have 52,000 miles on it, and owe about 8K. And... it is just like Brand New ! So, in 21 months... I will own it. And, because it is a Honda... it will probably run well, and look great... for at least another four to six years... maybe longer. All in all, I prefer to purchase.
BUY! With a lease you typically will put down a large down payment and at the end you have a large payout. In the mean time you make monthly payments. It's a real cash cow for the distributors who will make you think you're crazy not to lease. At the end of the day you've paid double.
I own a 10 year old Lexus ES and I lease my 2010 Lexus RX * lease payment is totally a tax deduction and I keep "miles" off of it by driving my older car on the weekends or when dealing with dogs to vet and doggie spa....I disagree that the "down" on a lease is high * I've leased 3 Lexus(Lexi) and never paid more than $2,000 down.
I am a lease girl...I love cars and like to change things often so I do short term leases...I know its not a good financial decision...but I am willing to pay the price for this...I am frugal with most of my life decisions...this one ...nope.
I have always owned but I too have thought about leasing. I have a nice Fx4 pick up and thought about leasing a car for a second vehicle.
I agree with James, buying with a good warrenty, you do not have to worry about the miles.
Thanks so much to all of you. Our accountant suggested leasing might be "cleaner," but the miles killed me. Currently, I'm buying the Lincoln MKZ and love the car... a lot of technology, but I'll have to see how it compares tax-wise to my previous lease.
There are two choices for deducting business use of the vehicle 1. standard mileage or 2. actual costs (w/ some IRS limitations). Either choice is available to buying or leasing although there are certain rules that apply to selecting the method. Either method only allows business use to be deducted - personal use is not deductible.
To me, the choice between buying or leasing is not about the tax implications, but rather the true cost of ownership during the time period you plan to have the vehicle. Tax deductibility is but one of the considerations in determining the true cost of ownership. As you pointed out, expected mileage is another consideration. More use (miles) means a higher lease payment is required.
An installment loan or a lease is a financing mechanism. One finances the USE of the vehicle (lease). The other finances the PURCHASE of the vehicle (installment loan).
There are lots of web sites available which provide info on the buy versus lease alternative.
Mel
Margo - I have also done both - I suggest purchasing since you really don't get the same value with leasing - I personally will never lease again.
Howdy and morning to you Margo
Margo, I own both of my Jeepy's, which main has to do with the amount of miles that I have to cover in my area. I actually go all way up to the borders of both New Hampshire, Vermont of Canada, which is about a 3 hour drive from where I am located in New Hampshire. Plus because a lot of the road that I drive on are mountain county back roads.
One of my Jeey's has a off road 5" lift kit under it, seeing that a lot of the area roads that I drive on are like off road driving. I have never found a dealers offer that, plus they don't really like you making a big changes like that to their vehicles.
Have a good one
Dale in New Hampshire
Thanks, Dale. I really think buying the vehicle is the best route for me. I've noticed I haven't been thinking as much about how many miles I'm putting on the car... a big plus since I drive several times a year to Pennsylvania. I've gotten so many good insights from my AR friends. That's why I love it!
I can't lease because of the Miles I drive, it is good if you trade your car in every couple years and do not drive as much as I do .
Hi Margo -- I tend to keep vehicles a LOOOOONG time, I'm now just getting ready to sell my 1992 Honda Accord with 230K miles on it. I paid cash for it back in 1992 and it's run like a champ with lower total cost of ownership, so I can't imagine if I had leased a vehicle for the past 18 years, that I would have come out ahead. But, my perspective is to keep cars for a long time, run them into the ground (if I can -- the Honda is still running), and lower my total vehicle costs over the long run. Not scientific or verified, but seems to make sense to me. if I were to replace cars every 3-7 years like many people do, I would probably still buy versus lease, but I would buy a car 3-5 years old where the depreciation has set in but it's still reliable with under 50K miles, but that's just me.
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