Business Car Leasing (lease, loan, small business, 2009)

[jbsvilla]

Hi

Need some advice I thinking of buying a small business and want to have a car that I can put "through" the business.

My question should I :-

* Buy a car outright

* Lease a car

* Finance a car

Any thoughts ?

Thanks in advance

[golfgod]

Leasing is generally the most expensive way to "own" a car.

Financing is the second most.

Buying a year old, low mileage car for cash and "running the wheels off it" is the next.

Buying a "beater" and keeping it running with bubble gum and duct tape is the cheapest.

I was self employed almost my entire career. My company made enough (most years) that I could've had a Benz/BMW/other as a "company" car. Instead I did number 3 above and put the $5K/year difference into my retirement account. I retired in my early 50s.

golfgod

[Donn2390]

Originally Posted by golfgod

Leasing is generally the most expensive way to "own" a car.

Financing is the second most.

Buying a year old, low mileage car for cash and "running the wheels off it" is the next.

Buying a "beater" and keeping it running with bubble gum and duct tape is the cheapest.

I was self employed almost my entire career. My company made enough (most years) that I could've had a Benz/BMW/other as a "company" car. Instead I did number 3 above and put the $5K/year difference into my retirement account. I retired in my early 50s.

golfgod

Every once in a while, you find a really intelligent answer in the forum. This one tops the list. Listen to this man, he knows of which he speaks.....

[spinach]

Originally Posted by jbsvilla

Hi

Need some advice I thinking of buying a small business and want to have a car that I can put "through" the business.

My question should I :-

* Buy a car outright

* Lease a car

* Finance a car

Any thoughts ?

Thanks in advance

You are always better off the pay cash for a used car, even if it is for business use. If you can not pay cash, go for a low-interest loan.

[sean98125]

Don't forget that the tax deduction for mileage is the same for a 1995 Corolla as it is for a 2009 Navigator.

[cubssoxfan]

Buying a year old, low mileage car for cash and "running the wheels off it" is the next.

If I may add to the above wisdom. Perhaps a 2-4 year old car will be a better value than a year old model. The older the car, the less depreciation you pay up-front (in theory, there are some exceptions) You can find a 2 year old car with original factory warranty remaining. You can find even older used car values with factory certified extended warranties. You do pay extra, but I found these to be much less expensive than 3rd party extended warranties without the fear of the warranty company dissapearing. This takes some of the initial risk out of buying someone else's problem car. I also recommend getting a one month subscription to car-fax and running a report on the cars VIN. I did this on a van a dealer wanted to sell me in IL. It was returned to the manufacturer under Ohio's Lemon Law. When I mentioned this as major reason in cancelling sale the dealer stated "We were going to tell you upon delivery" Riiiiiiiiiiiiiiiiiiiiight.