Trying to decide whether it’s best for you to buy or lease your new business vehicle? Let’s discuss how these two potions stack up.
When you purchase a vehicle for your business, you are able to then enjoy the tax benefits for the depreciation of the vehicle. Depreciation deductions are not allowed for a leased vehicle.
The initial up-front costs for leasing and buying vary greatly. There is not pat answer for this one. You’ll have to decide on an individual basis, whether it’s best for you to come up with a down payment, or a first payment plus security deposit.
Mileage expenses can be deducted for both a leased vehicle and a purchased one. Though, most leasing agreements have a mileage limit. You’ll want to pay attention to any mileage limits, if the vehicle will be used for long range travel.
Both leased and purchased vehicles will see a reduction in value due to wear and tear. Leased vehicles can carry a hefty fine for excessive wear and tear, so make sure you read your lease agreement thoroughly.
These are just a few things to consider when looking to add to your business fleet. If you need further consultation, feel free to contact us for a consultation.
Barry Kritz & Associates