Hello everyone!
I have an unusual (but I'm sure not unique situation) regarding vehicles. We have 2 paid off vehicles, one does not have enough seat belts for everyone in our family. The other is approaching the end of its useful life. I have already decided to sacrifice mustacheianism for convenience - 2 cars are the minimum and the paid off one without enough seat belts isn't leaving.
So. I also have a business and the replacement vehicle will be the "company car". According to my accountant, I have several options.
1. I can buy a used car and depreciate some pitifully small amount annually (like $1000), for a $300 annual tax saving.
2. I can buy a new car and if it's a "luxury car" (costing more than $16k) can depreciate the same small amount annually. Anything with enough seat belts will be a luxury car by this definition - law wasn't written to be inflation adjusted.
3. As a handout to the American auto industry/UAW, I can buy a new car greater than 6000# GVWR and immediately depreciate $25k, then depreciate the rest at the same pitifully small amount as above ($8k tax savings year 1, $300 per year ongoing).
4. I can also lease anything I want and all of the lease payments are tax deductable, yielding 30% tax savings for the life of the lease.
As far as I can tell, the best option would be to lease a used vehicle for 2 years, negotiate a very small residual, have the business lease the car, then buy it for the small residual at the end.
The only issue I'm having, is that I'm having trouble finding a company to hold the lease on a used car (the ones I found claim to have a $50k minimum - used Ferraris/classic Jaguars basically).
Does anyone have a better idea, or know someone that will lease me a 2008 Honda?