Ok, Im interested how everyone decided to pay for their new rig. I have been considering a lease because of the lower monthly payments and purchase at the end of the lease. 28K is alot of cash to me. What did you do and why?

 

cash

why

bought mine in march this year. was offered 5% financing rate. which to me blows. hence my decision. its hard to find a investment paying 5%+ unless you go out 30 years or is below investment grade.

as far as the stock market you can do that but its pretty hard because of the sensitivity to corporate numbers and outside factors ie terrorism, war, oil etc.

 

For me leasing make sense. I have been leasing for the past 10 years, but I deduct between 75 to 95% of the lease/year from taxes.

If you have that opportunity, leasing is very good. But it also makes sense sometimes even if you cannot deduct it from taxes, but that is quite a personal financial situation I think.

 

What do you have to do to be able to deduct that much from taxes? Is it business related? I'm kind of ignorant in this area.

Thanks

 

Yes, has to be business related; I do independent consulting and use my cars to get to work

Any expense that helps you perform your business is deductible.

Now imagine if you have a auto parts shop. Any upgrades on your car can be justified as a business expense. But... the business cannot be "hobby." IRS has several criteria to determine that and if you are actually not doing business or not having some reasonable revenue, they'll be on to you eventually.

 

About the only conditions were it makes sense to lease is if (1) you can deduct payments as a biz expense or (2) you keep cars 3 or less years and don't exceed 12,000 miles a year.

Save up until you have a decent down payment & buy. Also, finance rates are very good now if you have decent credit.

 

I bought mine. I drive too many mile and if I would have leased it, It would have cost me arm & leg at the end of the lease.

You should buy if:

-You drive lots of mile

-Have lots of money

-Planning on keeping the car for long time

-Want lower insurance premium

You should lease if:

-If you drive low miles

-want a low payment and have little or no money for down payment.

-If you are in sales. From what I know, Lease payments are tax deductable if you use your car for work
( you can always say that).

-Does not want to keep the car for long time


There may be more reasons for Lease vs Buying but thats all I can think of at this time.l

 

Hmmm..interesting about the taxes. I'm an CG artist that is trying to pick up freelance work on the side. At the very least, I assume I could deduct mileage. Unfortunately, I can't lease because of the mileage issue. I picked up my car in Feb and already have close to 11,000 on it. I have a long commute to my full time CG job and I like to drive

 

First, you should check with an accountant to make sure about all this.

If you put a lot of mileage on the car then leasing is really not for you. I put <15K mi. a year, and it works for me. However, if I could not lease, I would deduct mileage expenses; if I remember correctly the Federal rate is 36.5 cents/mi. That deduction might amount to even more than what you would pay for the car a year. The only down side to mileage deduction is keeping very very good records. I am a little paranoid about tax audits and I would not take risks, some do.

 

Thanks for the info guys. I will look into it.

 

You can't mod if you lease. Atleast that's my understanding.

 

I think the rule is that you must return the car in the same form it was given.

Ive heard 1 story(might not be true) where the dealer allowed mods(this wasnt a Z), but the proposition was a loss, because he just handed it back with these mods, so you funnel money into it, so the dealer can have a modified car to sell for no cost to them...

 

oh if you buy the car at the end, and KNOW that your going to do so, then I dont think it matters. but if your positiev you gonna buy it... you pay less overall to buy it now.

 

I've never bought a car with lease. How do they check how many miles you drove. Do you have to bring it in or is it a honor system?