Should Real Estate Agents Lease or Buy a Car?

By
Real Estate Sales Representative with Royal LePage / Moneyledgers Software

A common question Real Estate Agents have is whether they should buy or lease their vehicle.  Let's take a look at some of the Pro's and Con's of each.

 

Generally, leasing a car instead of buying only makes financial sense if you prefer a new car every 3 or 4 years and drive an average amount of miles each year. 

If you drive more than 15,000 or 20,000 miles per year you will be penalized for the high mileage with a larger monthly payment or a penalty at end of the lease. 

If you only drive 5,000 or 10,000 miles per year you will not be given credit for the low mileage on the car unless you choose to buy it at the end of the lease term.

 

This chart will help highlight some factors:

 

realtors buy versus lease auto comparisons

 Other Factors to Consider

Buying May be Better WHEN:

  • If you are looking to drive a vehicle for 5 to 10 years, then purchasing a vehicle may be the better option.  It saves you the trouble and fees involved in buying out the vehicle at the end of the lease term. It also is more likely you will pay the vehicle off sooner than having to pay a lease for 3 or 4 years and then financing the lease buyout for another 3 or 4 years.

  • If you prefer a less complicated transaction without all the terms and conditions you may prefer a purchase.  No concerns about restrictions and requirements of the leasing company regarding use, or condition of the vehicle at dropoff, or mileage penalties, or early termination restrictions.

  • If you prefer to buy a "used" vehicle then you will prefer to purchase. You can save considerable money on the "purchase" when buying a 2 or 3-year-old vehicle. .

 

Leasing May be Better WHEN:

  • You do not want to use up your line of credit for a vehicle purchase.
  • You want to invest in your business rather than investing in a vehicle purchase.
  • You want to drive a newer or more expensive car but not have the large payments.
  • You prefer a tax deduction that is consistent year after year.

For an online Lease versus Buy calculator click here


 

Our Products and Services:

** FREE tax deduction checklist for Real Estate Agents: click here
** bookkeeping software for real estate agents: www.agentledgers.com
** virtual bookkeeping services for real estate agents: www.myvirtualbookkeeping.com 

 

Note: This is general information to help you gain an understanding of U.S. tax laws. I am not a tax attorney or tax preparer. Please consult a qualified expert when you are preparing your tax returns or making tax-related decisions. 

Comments (5)

Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Everyone should consult their CPA or financial advisor.  That is who knows best on this issue.  For some it is better to lease, and for some it is better to buy. Have a great weekend. A

Dec 08, 2017 01:44 PM
Steve Penner

good input! thanks :)

Dec 08, 2017 01:49 PM
Tyra Hatcher Mitchell
Alliance Realty - Portland, ME
Southern Maine Realtor

Buying has always worked well for me. I do drive a lot but I take excellent care of the cars and they last 5-10 years and are sold. We always pay cash so we don't have the added interest.

Dec 08, 2017 01:46 PM
Steve Penner

yes, that certainly can make very good sense in your case. Thanks for the input!

Dec 08, 2017 01:49 PM
Gary & Melynda Wolter (CRS) 480-269-1164
ProSmart Realty - Mesa, AZ
Reliable, Premier Personal Service since 2001

We have never rented a car...love the chart you supplied. It helps makes some sense out of it all. Thank you so much!

Dec 08, 2017 01:47 PM
Steve Penner

Thanks Gary... yes, these things can get confusing at times... better to step back and look at the pro's and con's without any emotion and make a rational choice based on the right factors.. once we are in the car, the new car smell can cloud our judgement at times :)

Dec 08, 2017 01:51 PM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I never buy new so I use the milage deduction.  Simple to use

Dec 08, 2017 06:53 PM
Steve Penner

Ok... so no leasing in that case.. I also buy used vehicles most times. Although I have also leased a new car when incentives are good.

Dec 08, 2017 06:57 PM
amelie taylor
real realestate - Assumption, NE
market manger

thank you for the article.

I prefer to lease. when you lease a car you don't need to worry about the car history but when you buy a used car you should at least make a free vin check.

I prefer to go on the safe side

May 05, 2018 11:51 PM

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