If I can claim a 75% deduction on a lease payment for a Clubman S (let's say payments were $425/month versus $525/month to buy), would it be smarter to lease up front to take the deduction and just buy at the buyout price later on?

 

It's never smarter to lease a car. No matter which way you go, you will end up paying the full value of the vehicle and you give the dealer control of the interest rate that you will be paying, and your car's value at the end of the lease. It's not a "better" deal to lease, at best, it's the same deal.

I imagine that if you shopped around, you could find an excellent interest rate on a five year loan and I recommend that you do so.

 

Perhaps, but I can't write off nearly as much in depreciation as I can with a lease.

 

Do what your financial situation works best for you. Of course you can negotiate your own interest rate on a loan.

Here's a great site to get you on your way
http://www.leasecompare.com/

To calculate the interest rate, ask for the money factor. Multiply by 24 and that will give you the interest rate.

 

I saw a thread the other day about Pen Fed having 4.25%

https://www.northamericanmotoring.co...federal+credit

 

A big factor to take into account is how many miles you drive. The leases are normally 10-12,000. I think it is a pretty big penalty if you go over.
My hubby and I normally go about 24,000/ a year. When you have a MINI you love to MOTOR!!!

 

never pays to lease. you can still depreciate a car over 5 yrs on regular depreciation and you will own it and at a reduced rate f interest. i own my own business and i buy and depreciate it. there is a limit to what you can depreciate but the mini is ok now a lambo or ferrari is not a good idea.

 

I am not saying that leasing is your best deal. You asked a question and I'm just giving you answers to those questions. No one knows your circumstances better than you or your accountant. You can lease a car on the basis of 10,000 to 20,000 miles. You can check lease quotes with a variety of sources. YMMV.

 

I have a friend that is self employed.

He (not sure if 4 or 5 years I think 4).
He buys a new car every 4 years and does
the depreciation.

He keeps another car much more used, for personal use.

He says having 2 cars makes the accounting much more
straightforward.

Also, he says if he didn't do this, he would just lose the money
in taxes anyway (really doesn't want to buy a new car
so often but the money is gone anyway)

 

It can pay to lease....read:
http://www.leasecompare.com/autolease101_1.php
...and there are business reasons too - although the leasing by a business is not as advantageous as it once was.

Also...check www.swapalease.com for people who want to trade their lease. There are Minis on the site.

 

Some more food for thought: http://www.consumerreports.org/cro/m...-or-buy-ov.htm for an April 2008 piece on the pros and cons.

Best wishes!

 

Depends on how long you plan to keep it. If you are going to depreciate the majority of it in the first few years then get rid of it you could be hit with a gain if you sell for more than the depreciated value thats left in the car. Unless you plan to keep it forever it would cost you more in the end either way you go.

 

IMHO, if you needed an SUV for 3-4 years, I would lease, no matter what. An SUV is a tough sell right now and does not look like it is going to be any easier with gas prices going up.

The Mini is a different animal. If you are undecided about it being a long term vehicle for you, think hard about leasing. You can make the buying decision anywhere down the leasing road or at the end of your lease.

We bought an 07 Civic exactly a year ago for 0 down. The thing has really held it's value - right now we owe almost exactly what it is worth. Uncanny, really! I am not sure that you would get that kind of situation even with a Mini.

 

I'm not 100% sold on owning a Mini after the maintenance/warranty period is up. My future goal is to get a 335i coupe or an M3 after another 2-3 years when I have a much higher income level than present (I'm only 22 now). However, I drove the manual Cooper S and thought it was incredibly fun, plus it's got great gas mileage and costs $20k less (i.e. nearly half the monthly payment of the 335). I figured if I wanted to keep the car that the buyout price would probably be lower than market value, and if I wanted to sell it I could get some money back out if that was the case. If it was somehow lower than the residual value, I'd just turn it back in and go on with my plans of a different car.

 

Seems like a lease is in your future. Use that website I sent you for a guide. Do not get sucked into a high interest rate, make sure you negotiate enough miles up front and do not pay add ons like dealer transfer fee, advertising or when you have decided on leasing, any crazy 'condition of the vehicle' guarantees. Leasing negotiations are exactly like buying negotiations. They don't even have to know which way you are going until you sign the preferred contract. Good luck!!

 

WJ94, whatever you do, show us the math.
Assumptions have to be made and we need to see them to know how you're calculating a lease savings.

Happy Friday.

 

look us susie ormand she is an authority on tax savings and she states on her show never lease a car. when the depreciation is done you can sell the car for a fair price to yourself from the business if you like. it is best to have two cars as previously stated then all then all the miles on the coop are for the business. you get 100% depreciation write off including oil changes and repairs and insurance rates.

 

I have had it both ways. If you can drive under 12,000 miles a year, and you CANNOT afford a decent downpayment.. Lease....

If you plan on modding your car at all... BUY!!!

IF you are interested in an S and you have any kind of decent roads to play on.. leaseing overages are gonna kill you...

If you live in any area with an active MINI community, your mileage WILL vary!!! ))

 

Leases are not limited to 12,000 miles a year.

 

very true.. and you pay for it..

I had leased very nice Ford Probe.. paid for the mileage i had averaged the 2 years before (24K).. ended up overpaying so much.. that it was way cheaper to buy the car out at the end.. and got NO credit for the unused miles....


your call

 

I ran one lease example for an R53 12,000 mile/year lease and came up with $390 a month. For 15000 miles it was $396/month. For 18000 miles $437/month. For 20,000 it was $464 a month.

If you think you might exceed 12,000 miles, an extra $72 a year gets you 3000 miles at a cost of 2.5 cents a mile.

If you might need 18000 miles, you are paying an extra $564 a year therefore costing less than $0.10 per mile.

Based on 'buying' 20,000 miles - $11 per mile.

Many leases penalize you at least $0.15/mile and most $0.20/mile. You are better off buying those miles upfront, don't you think?