Author Topic: Help with a "new" car situation (re: used car leasing)  (Read 1994 times)

CALL 911

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Help with a "new" car situation (re: used car leasing)
« on: March 10, 2013, 10:40:23 AM »
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?

James

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Re: Help with a "new" car situation (re: used car leasing)
« Reply #1 on: March 10, 2013, 01:02:30 PM »
I assume options 2 and 3 are tossed out the window, leaving 1 and 4 remaining. I would suggest option 1 unless you can find proven great savings in option 4. In order to save more than option 1 you must spend more than option 1, and I don't know why that would be necessary unless you spend more than $1,000 per year you are going to drive it.  (i.e. spend more than $6,000 for a vehicle you will use for 6 years)

DoubleDown

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Re: Help with a "new" car situation (re: used car leasing)
« Reply #2 on: March 11, 2013, 10:14:17 AM »
If you decide to lease, you can take over a lease from someone who is looking to get out of their agreement on a used vehicle. Sites like swapalease.com provide listings of people looking to get out of their lease agreements for whatever reason, such as losing their job, and are often willing to take a loss in order to get someone else to take over their payments. It is all handled legally, where the lease is transferred to you by the dealer. If you shop around you can find some pretty good deals, plus there are discounted dealer listings as well (3rd party resellers, not auto manufacturers) on new and used cars.

CALL 911

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Re: Help with a "new" car situation (re: used car leasing)
« Reply #3 on: March 23, 2013, 04:19:59 PM »
I looked at swap a lease and some other competitor, and don't see what I'm looking for. They all appear to be taking over a traditional lease with 1-2 years left on it, meaning that at the end of the time, I have to either return the car, or buy it for their residual. None of the vehicles are mustashian, since the oldest are 2010's. No 2005-2008s available. Thank you for the help though.
Edit: I just found (at least per their website) Honda will offer a lease on certified pre-owned Hondas, some as "new" as 2008s.
« Last Edit: March 24, 2013, 09:04:00 AM by CALL 911 »