Should I buy or lease my next car?
This is a very common question we receive, especially from business owners. They often want to know if their business should lease the car and what the tax effects will be.
First, get information on both scenarios to determine what the prices will be for both scenarios. Don’t forget to get the residual value on the lease. Then, you can determine the internal interest rate on the lease and determine which scenario is a better value for your dollar. You should also consider how many miles you will put on the vehicle. If you may go over the mileage allowance, you are probably better off purchasing the vehicle.
If you own a business and the business is the buyer or lessor of the vehicle, you will probably end up paying higher insurance rates for commercial vehicles and higher registration and property taxes. It usually works out better for the individual to purchase the vehicle and have the business reimburse the individual by the mile at the standard mileage rate. The only real exceptions to this is if you plan to purchase a Hummer or gas guzzling vehicle where actual expenses are preferable to the standard mileage rate. The rate for 2011 is 51 cents per mile.
If you still are not sure, we can perform a detailed analysis of lease vs. purchase based on the details of each deal that you provide to us. Let us know if we can help with this.
Donna Bordeaux, CPA with Calculated Moves
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.