Leasing v. Buying?
I am frequently asked to consider whether a client is better off buying or leasing a vehicle, taking into consideration tax implications…. I believe the answer is a business decision, without considering taxes…. more
Lease or Buy? Tips For Financing Your New Vehicle
Additional practical considerations, particularly understanding issues surrounding leasing an automobile are discussed in this article provided by The Chartered Professional Accounts of Ontario.
Ownership – Company v. Personal?
Another issue is whether the company or shareholder should be the registered owner. If a vehicle is clearly used exclusively in a company’s business then ownership should be registered in the company’s name. If a family has two vehicles, it could be…. more
New or Used Automobile?
As an accountant, I consider it fiscally responsible to keep an automobile as long as possible and usually to buy a previously-owned vehicle. This approach avoids losing value/equity immediately driving off the automobile dealer’s lot. As long as maintenance costs of your vehicle are reasonable, then you are able to apply your cash to savings or other investments.
This year I actually bought a new automobile as my last (2003 model) would go no further, and through a friend’s advice discovered the cost of a new vehicle was actually less than a “used” car. It helped that the automobile dealer had a “no interest loan” package, making the negotiated price of the new vehicle less than cost of a used automobile after loan interest was calculated in.
My new automobile came with a warranty, so I should not have to dig into my pocket to cover costly repairs for a few years. I was also able to make my loan repayment over 36 months. So I will able to put monthly car payments towards savings once I own the vehicle free and clear in 3 years.
The only negative was my insurance costs increased. Not so much as to be a “deal breaker”. I suppose my old vehicle had no real market value, so I should not have been surprised.
To consider other issues on buying a new or new-to-you automobile read this article provided by The Chartered Professional Accountants of Ontario.