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Old 01-22-2007, 12:15 AM
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What is better for business lease or purchase of a Car??

Dear TaxGuru,

What is a better choice between leasing a car or a purchasing a car? I heard from the car dealer that a lease is better for my unincorporated business. Can kindly give me your input.

I appreciate your help.



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Old 02-18-2007, 07:56 PM
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Dear Johncroy,

This is not an easy answer based on the information provided. However, we have now purchased Auto Lease vs Buy Tax calculator program to aid you in making a calculated decision to decide whether to buy vs lease a auto. This program can be assessed under the tax calculator downloads on the left side of the website.

However, I have generally found that in a vast majority of cases, for clients who are owners in very sucessful businesses, generally prefer to choose the Lease option vs the buy option. This is because after consideration of time value, inflation, depreciation of purchased auto, opportunity cost of the downpayment on acquistion costs of auto, there is clearly a material advantage of leasing vs purchasing a vehicle.

Once again, someone might prefer to own a vehicle and it is usually hard to convince them otherwise. Today, leasing is extremely popular with even small businesses. Howvever, one caveat, the customer must be a good negotiator and well informed of leasing terms and conditions.

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