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Hello, I am looking to get a new vehicle. I am also starting a new job where I will have to drive possibly 100 miles a day. Would it be best to lease or buy a new car?
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Last edited by cnelson101; 05-27-2016, 05:20 AM. -
I'm not sure leasing is ever the best option, unless the business is leasing the vehicle for you to drive. Is it reimbursable mileage or just a commute?Originally posted by cnelson101 View Post -
Is your employer not going to reimburse you mileage or give you a car allowance ? If they are, then there's nothing you can deduct, because you are already getting reimbursed. In that case, the deduction now belongs to THEM.
Contrary to popular belief, it makes no difference whether you buy or lease - the purchase price and/or payments and/or lease payments are deductible as a business expense or unreimbursed job expense ...IF you are using the car 100% for business or your job. If you are an employee, you are looking to deduct the costs as an unreimbursed job expense.
if only half of its use is business, then only half of the price / payments are deductible as a business expense.
Many folks have been caught by the unawares when they are audited ... They've deducted all or a portion of their vehicle expenses as business expense, but they are ill-prepared or unable to demonstrate that the vehicle was in fact used for business purposes commensurate with what they deducted. BIG problem.
Claiming car expenses as a business deduction is RISKY BUSINESS. You are far safer keeping a log of your miles and deducting $.XX per mile, pursuant to the allowable established by the IRS, as an unreimbursed job expense.
Keep in mind that driving your car to and from your place of employment is NOT deductible mileage.Last edited by TexasHusker; 05-27-2016, 08:42 PM.Comment
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I just realized that I may have given an answer to a question that the OP wasn't asking.
If the question is, should I buy or lease a new car because I'll be driving it 100 miles or more per day, the answer is absolutely not.
For that purpose, you want to find a 4-5 year old Toyota Highlander or Camry that you can basically drive the wheels off of. At 100 miles per day, it won't be worth much in 5 years, but at least you only lost $10K instead of the $20K you'll lose on a new one.Comment
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Originally posted by cnelson101 View PostI totally agree with TexasHusker. Absolutely do not lease a new car. Driving 500 miles/week, you'll blow through the mileage cap in no time. Buying a new car also makes no sense because you'll be driving the thing into the ground in no time.Originally posted by TexasHusker View Post
Buy something a few years old with low mileage. The steepest depreciation will have already occurred. Then you can drive the thing until it dies, which won't take long at that rate, and repeat the process.Steve
* Despite the high cost of living, it remains very popular.
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I concur. That's a lot of driving, so a lease doesn't make sense. By a relatively low mileage used car. It will be reliable enough that you shouldn't have major problems with it, but you also won't have to spend a bunch of money on a car that will have little resale value due to how much you'll be driving.Comment
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Thanks for all the replies! I am getting reimbursed 54 C/mile, I have looked into deductions for taxes to see how that works. I just wanted something newer with GPS since I have no clue where I am going, but I also understand how much cars depreciate. Decisions decisions!Comment
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Do you have a smartphone?Originally posted by cnelson101 View Post
I don't use GPS a lot but when I do need it, I just grab my iPhone.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
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Leasing makes no sense because you are going to go over the mileage limits between 4-6 months. Buying new would be the better choice between the two given options but it's still not ideal because you will be paying for depreciation on the front and back end. What I would label front end depreciation is the inherent loss of value within a vehicles first 3-5 years regardless of miles and wear and tear. Back end depreciation would be after 3-5 years when the depreciation rate starts to level off a bit and is based more heavily on mileage and interior and exterior condition rather than an arbitrary measure like age. Because you are going to rack up the miles rather quickly and put a lot of wear and tear on the vehicle you are going to get hit up with more back end depreciation than someone who has a 10-20 mile commute.
IMO the most economical solution would be to buy a 3-5 year old car that has between 30K-50K miles on it. This way you avoid the front end depreciation because inevitably you will get hit up more on the back end due to your long commute. Also with a vehicle under 50,000 miles that has been serviced routinely and well maintained you should be able to drive for a couple years without any need for a costly major repair.Comment
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Make a little holder out of duck tape, so you can mount your iPhone on the dash. Voila! You've got GPS!Originally posted by cnelson101 View Post
The cheapest car is the one you already own.Comment
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You don't even need to do that. I use my iPhone for GPS on occasion. I punch in where I'm going, hit start, and just leave the phone sitting on the passenger seat or in the center console. I don't need to see it. In fact, you should NOT be looking at your GPS while you're driving! I only need to hear the directions. No need to mount it anywhere. That's just dangerous. I'll never understand the people I see with their GPS mounted on the windshield blocking their view of the road.Originally posted by TexasHusker View Post
Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
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Well thank you for everyone's views. According to me it depends on our budget whether to have a new car or not.Comment
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Buying a car is a better option if you have that budget.Comment
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It was a joke.Originally posted by disneysteve View PostYou don't even need to do that. I use my iPhone for GPS on occasion. I punch in where I'm going, hit start, and just leave the phone sitting on the passenger seat or in the center console. I don't need to see it. In fact, you should NOT be looking at your GPS while you're driving! I only need to hear the directions. No need to mount it anywhere. That's just dangerous. I'll never understand the people I see with their GPS mounted on the windshield blocking their view of the road.
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