Do you want to drive a new car every couple of years? Do you drive a car that changes body styles regularly? Do you wish you could drive a better car but can't afford the high monthly payments? If you answered yes to these questions then you might enjoy the advantages of car leasing. Take a look at some of the other advantages car leasing provides.
Car leasing is a good option for the self-employed or small companies that need to provide a car for their employees. As long as the car is used for business purposes, part of the lease payment can be deducted. Some car related expenses can also be deducted. If you work for a company but use your car to conduct business it is possible benefit from leasing tax advantages. Tax attorneys can clarify which leasing tax advantages will apply to you.
The IRS provides two informational booklets about business leasing tax deductions: publication 917 and publication 535.
When purchasing a car you typically pay for 3 components: equity, depreciation and interest. When leasing you are only paying for 2 out of the 3 components of the car; the interest and depreciation. Since you are not paying for the car's equity, or ownership, the payments are much lower.
Car leasing is a good deal for you and the dealer. You get to drive a better car than you could afford to buy and the dealer essentially gets to "sell" the car twice. You are paying for the time you drive the car. When you turn the car in at the end of the lease the dealer gets to sell the car for retail value.
For example: A car is worth $34,000 dollars. As a leaser you will only pay the difference between the car's current worth and what it will be worth at lease end. If the car is expected to be worth $15,000 in 4 years, when your lease is up you will paying for $19,000 dollars while you use the car. The dealer will expect to sell the car for the remaining $15,000 to someone else. Your monthly lease payments are so low because they are based on $19,000 dollars, not $34,000 dollars.
A car lease typically lasts 3 years; so does a new car's warranty. You won't be stuck driving a car with an expired warranty, which helps insure you also won't be stuck with major repair bills. All you need to do is make sure you don't lease a car for longer than its warranty. It can be a relief to know you are covered.
If you are a person who appreciates the look, feel and smell of a brand new car, then leasing is a great advantage over buying. Cars seems to change body styles so much that what was cool now is old news in 3 years. If you purchase a car you're stuck with the same old body style until it is paid off. Once you pay the car off, no one else wants that body style either. Now you are stuck with a car you don't like and won't bring the money you need for your next car.
When leasing a car, you drive the car you want for a low monthly payment and turn it in for a different model in a few years. No worries about not having the newest style. You know you are completely free and clear to pick another car when your lease ends.