Question for the Money Doctors

Question submitted on Mar 27, 2021.

Question

Are there tax benefits to leasing a car vs buying a car? The car will be used for business 80% of the time. Also, I am self employed as a real estate broker

Answer

Generally, you receive more up front tax benefits when buying instead of leasing a new vehicle due to the ability to take accelerated depreciation.  In addition to tax consequences, you may also want to consider how many miles you'll be driving each year since most leases have an annual allowance.  You may also consider how often you plan to replace the vehicle.  I've told clients in the past if you can pay for the vehicle in say, 3 years, and drive it for say, 5 years, you wind up in a much better cash position as opposed to always having a monthly payment.

For additional information visit //www.360financialliteracy.org/