Author Topic: is it OK to lease a car....  (Read 12366 times)

RH

  • Stubble
  • **
  • Posts: 106
is it OK to lease a car....
« on: October 16, 2014, 09:00:37 PM »
Now that I have your attention....
My wife is a real estate agent and sells $700K properties. I can tell you that the real estate biz is very image driven and unfortunately what you drive does matter in this price point. As hard as it sounds to me, leasing makes the most sense since her avg commission per sale is $18k. I'm not crazy, right ?

Villanelle

  • Magnum Stache
  • ******
  • Posts: 2530
Re: is it OK to lease a car....
« Reply #1 on: October 16, 2014, 09:05:20 PM »
Now that I have your attention....
My wife is a real estate agent and sells $700K properties. I can tell you that the real estate biz is very image driven and unfortunately what you drive does matter in this price point. As hard as it sounds to me, leasing makes the most sense since her avg commission per sale is $18k. I'm not crazy, right ?

Even if we take as a given that she needs a fancy car, why would you lease instead of buying an almost new used car?  Find a 1-2 year old car with <10,000 miles. 

lakemom

  • Bristles
  • ***
  • Posts: 399
Re: is it OK to lease a car....
« Reply #2 on: October 17, 2014, 05:15:02 AM »
Now that I have your attention....
My wife is a real estate agent and sells $700K properties. I can tell you that the real estate biz is very image driven and unfortunately what you drive does matter in this price point. As hard as it sounds to me, leasing makes the most sense since her avg commission per sale is $18k. I'm not crazy, right ?

With just a couple of commissions she could pay cash for a late model very nice car.  Rinse and repeat IF (and that's a huge IF) she sees her commissions dropping off because of the age of her car and for no other reason (her marketing, her personality, a crappy market temporarily).  IMO, unless the buyer/shopper is a huge car person, most people won't know the difference between a very well kept somewhat older car and and a brand new just drove it off the lot yesterday car.  Sounds to me like a simplistic, whineypants justification for leasing a new car.

HairyUpperLip

  • Pencil Stache
  • ****
  • Posts: 897
Re: is it OK to lease a car....
« Reply #3 on: October 17, 2014, 08:41:56 AM »
A good friend of my mom's only does $million dollar + homes as a real estate agent.

Every 2 years she gets a new car. They are leased and it's always some kind of fancy Mercedes/Porsche convertible that she uses for taking out clients. The car is hardly driven and it's a third vehicle for the family.

I understand where you are coming from - I think it's pretty interesting when people have beat up cars and then slap their real estate agent sign, business, etc on the vehicle. I particularly find it amusing when mobile detailing companies have a FILTHY vehicle.

That being said, if you guys are making over $18k a month from just her salary I don't think a lease is that big of a deal. Check out leasetrader.com and you can takeover people's leases. Lots of options to get cars that have 12 months or less left. Some people will offer cash for you to take over their leases.



Timmmy

  • Bristles
  • ***
  • Posts: 446
  • Age: 35
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #4 on: October 17, 2014, 09:13:24 AM »
Leasing is hands down the most expensive way to operate a vehicle.  There is never a case where leasing makes sense. 

Buy a nice used car and save your "lease payments" and periodically upgrade the car. 

You guys should be buying high end cars off lease.  These would be 2-3 years old, dealer maintained, relatively low miles.  They can still be very nice cars.

And in case this wasn't obvious...  You should be paying cash for the cars. 

AgileTurtle

  • 5 O'Clock Shadow
  • *
  • Posts: 97
Re: is it OK to lease a car....
« Reply #5 on: October 17, 2014, 09:45:18 AM »
I wonder if you could hack the system but driving a classic type car.  Pull up in a 60's Corvette or Cadillac that looks good and could have the same effect. Maintenance and MPG may suck but it might be cheaper in the long run. Plus you end up with a cool car not some boring Mercedes ( I hate them)

BaldingStoic

  • 5 O'Clock Shadow
  • *
  • Posts: 83
Re: is it OK to lease a car....
« Reply #6 on: October 17, 2014, 09:50:45 AM »
Check with a qualified accountant (which I'm not) but I believe that since the car is used for business,  you can write off the lease as a business expense.  This is a terrific tax deduction and will offset the extra cost of going the lease-vs- buy route.   As long as you can get the deduction then I'd say go for it.

Timmmy

  • Bristles
  • ***
  • Posts: 446
  • Age: 35
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #7 on: October 17, 2014, 09:53:43 AM »
Check with a qualified accountant (which I'm not) but I believe that since the car is used for business,  you can write off the lease as a business expense.  This is a terrific tax deduction and will offset the extra cost of going the lease-vs- buy route.   As long as you can get the deduction then I'd say go for it.

You can alternatively write off the depreciation on a purchased vehicle. 

klystomane

  • Stubble
  • **
  • Posts: 180
Re: is it OK to lease a car....
« Reply #8 on: October 17, 2014, 11:13:21 AM »
Now that I have your attention....
My wife is a real estate agent and sells $700K properties. I can tell you that the real estate biz is very image driven and unfortunately what you drive does matter in this price point. As hard as it sounds to me, leasing makes the most sense since her avg commission per sale is $18k. I'm not crazy, right ?

What's the priority here, saving money or saving time/hassle? We are assuming here that your wife must have a new/almost new car every few years.

With leasing, you are always paying more pound for pound.

If you want to save money, then go with buying a new/used car and sell it every few years (whatever is appropriate for your wife).

The disadvantage is that you will have to spend the time to go shop and find the right car, maintain it, and put in some hours to sell it later on.

Therefore:
If saving money is more important --> buy new/used
If time and convenience are more important --> lease

juuustin

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: is it OK to lease a car....
« Reply #9 on: October 17, 2014, 11:21:28 AM »
Check with a qualified accountant (which I'm not) but I believe that since the car is used for business,  you can write off the lease as a business expense.  This is a terrific tax deduction and will offset the extra cost of going the lease-vs- buy route.   As long as you can get the deduction then I'd say go for it.

This is possible, but she would need to keep meticulous records if she also used the vehicle as her daily driver.  Let's say she drives 15,000 miles in the year, but only 5,000 miles are business related.  She can only deduct 33% of the expenses in that case.

Sid Hoffman

  • Pencil Stache
  • ****
  • Posts: 743
  • Location: Southwest USA
Re: is it OK to lease a car....
« Reply #10 on: October 17, 2014, 11:38:47 AM »
You can alternatively write off the depreciation on a purchased vehicle.

My CPA has often posted in his tax tip page as well as their Facebook page that writing off a leased vehicle is far easier from a tax perspective and generally gets you more cost written off versus buying and later selling the car.  It gets even more complicated if the business has to just sell the vehicle at the end as opposed to trading it in on another vehicle.  Leasing sounded like it was much more predictable for small businesses, but I'd either consult with a CPA or at least do some internet research on the topic.  Another element is that it's going to potentially be different in every state.

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3308
  • Age: 36
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #11 on: October 17, 2014, 11:47:50 AM »
And why, exactly, can't she just ride a bike?

Bob W

  • Magnum Stache
  • ******
  • Posts: 2947
  • Age: 60
  • Location: Missouri
  • Live on minimum wage, earn on maximum
Re: is it OK to lease a car....
« Reply #12 on: October 17, 2014, 11:49:33 AM »
Can't imagine this ever penciling out.   It might but my main concern is that leases generally are limited to 10 or 12K miles per year and then it is a steep charge per mile.

juuustin

  • 5 O'Clock Shadow
  • *
  • Posts: 67
Re: is it OK to lease a car....
« Reply #13 on: October 17, 2014, 11:57:35 AM »
Can't imagine this ever penciling out.   It might but my main concern is that leases generally are limited to 10 or 12K miles per year and then it is a steep charge per mile.

Let's make the assumption that she deals mainly locally and thus doesn't commute very far to an office.  All other travel can be handled by the OP's vehicle.  She could easily stay under a 12K/year limit.

RH

  • Stubble
  • **
  • Posts: 106
Re: is it OK to lease a car....
« Reply #14 on: October 17, 2014, 12:08:24 PM »
"Therefore:
If saving money is more important --> buy new/used
If time and convenience are more important --> lease"


In this case, time and convenience are more important. Piece of mind too with the bumper to bumper warranty/free scheduled maintenance. She deals with local real estate, so miles are 5K/year.

Once we retire early, I can assure you that we will pay cash for a fuel efficient little car. Leasing is a 'cost of doing business' for her to maintain this income (sellers judge you by the car you pull up in when you are trying to get their business...it's true). Leasing cost = purchase price minus residual value + finance charge + full coverage insurance. I always negotiate the purchase price and we lease when last years model is being phased out.

I'm fortunate enough to be able to bike to work and we are mustachian in all other aspects of our life. This is why leasing is a love/hate thing with us.

skunkfunk

  • Handlebar Stache
  • *****
  • Posts: 1057
  • Age: 33
  • Location: Oklahoma City
Re: is it OK to lease a car....
« Reply #15 on: October 17, 2014, 12:16:48 PM »
I wonder if you could hack the system but driving a classic type car.  Pull up in a 60's Corvette or Cadillac that looks good and could have the same effect. Maintenance and MPG may suck but it might be cheaper in the long run. Plus you end up with a cool car not some boring Mercedes ( I hate them)

I love this idea. That stuff will actually cost less than a new luxury car believe it or not (you could get a GREAT firebird or something for $25K), is easier to fix (either for yourself or your favorite mechanic), and doesn't really depreciate. Even if it DID depreciate due to an accident or something it won't be anywhere near as bad as a late-model. Once those fancy cars are too old but not classic, they're useless.

Timmmy

  • Bristles
  • ***
  • Posts: 446
  • Age: 35
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #16 on: October 17, 2014, 12:58:23 PM »

In this case, time and convenience are more important. Piece of mind too with the bumper to bumper warranty/free scheduled maintenance. She deals with local real estate, so miles are 5K/year.


In that case, why stop at a leased car?  Just hire a car service or limo. 

You can alternatively write off the depreciation on a purchased vehicle.

My CPA has often posted in his tax tip page as well as their Facebook page that writing off a leased vehicle is far easier from a tax perspective and generally gets you more cost written off versus buying and later selling the car.  It gets even more complicated if the business has to just sell the vehicle at the end as opposed to trading it in on another vehicle.  Leasing sounded like it was much more predictable for small businesses, but I'd either consult with a CPA or at least do some internet research on the topic.  Another element is that it's going to potentially be different in every state.

It's certainly easier for THEM to do the accounting for a leased vehicle but there is nothing complicated about keeping a deprecation schedule and tracking basis in an asset.  If your CPA considers that complicated, find a new CPA.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2914
  • Location: WDC
Re: is it OK to lease a car....
« Reply #17 on: October 17, 2014, 01:23:29 PM »
You can alternatively write off the depreciation on a purchased vehicle.

My CPA has often posted in his tax tip page as well as their Facebook page that writing off a leased vehicle is far easier from a tax perspective and generally gets you more cost written off versus buying and later selling the car.  It gets even more complicated if the business has to just sell the vehicle at the end as opposed to trading it in on another vehicle.  Leasing sounded like it was much more predictable for small businesses, but I'd either consult with a CPA or at least do some internet research on the topic.  Another element is that it's going to potentially be different in every state.
With a leased vehicle, you can write off the FULL business use percentage of the cost (not just the depreciation).  So you could actually write off the entire cost.   

I also agree that customers want their agents to look successful and professional.  When I started my business, I bought a car that most on this forum would call a clown car.  It gave me the look of success, which brought in more business and certainly told my clients that I am used to a high pay rate for my services.  If I show up in anything cost conscious, my potential customers think they can start knocking my rate down. 

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: is it OK to lease a car....
« Reply #18 on: October 18, 2014, 08:57:41 PM »
I can see that this is a job in which she really does need to project a professional image -- and that includes her car.  However, I agree with those who say, Just buy the car.  It'll be cheaper in the long run.  I think she'd be FINE with a nice-looking, classic car . . . that is scrupulously clean.

A friend of mine who's a real estate agent once commented to me that a mini-van is the perfect vehicle.  She said she can carry a whole family of clients out to see a house, and it's appropriate to pull a mini-van up in front of a modest middle-class house or a mansion.  Of course, this was some time back . . . before SUVs made mini-vans out of style, and I don't think SUVs have that same universal appeal -- plus they're quite expensive to keep.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8428
  • Registered member
Re: is it OK to lease a car....
« Reply #19 on: October 20, 2014, 11:17:47 AM »

In this case, time and convenience are more important. Piece of mind too with the bumper to bumper warranty/free scheduled maintenance. She deals with local real estate, so miles are 5K/year.


In that case, why stop at a leased car?  Just hire a car service or limo. 



LOL, I just saw a realtor get into an Uber SUV the other day.

And why, exactly, can't she just ride a bike?

LOLOLOL.  Seriously, though, it would have to be one of those cargo models with a bucket in the front.  The question is, should the client wear a helmet?

m8547

  • Bristles
  • ***
  • Posts: 311
Re: is it OK to lease a car....
« Reply #20 on: October 20, 2014, 10:17:28 PM »
A friend of mine who's a real estate agent once commented to me that a mini-van is the perfect vehicle.  She said she can carry a whole family of clients out to see a house, and it's appropriate to pull a mini-van up in front of a modest middle-class house or a mansion.  Of course, this was some time back . . . before SUVs made mini-vans out of style, and I don't think SUVs have that same universal appeal -- plus they're quite expensive to keep.

I agree. I wouldn't want to do business with a real estate agent that drives an expensive car, no matter what house I'm buying. Their fees already seem excessive, so no need to waste money that I will eventually be paying them on a car. A minivan made in the last five years would be good, and it can hold plenty of people even adults. They are not expensive and they don't draw attention (positive or negative), but they get the job done. Newer Honda Odysseys even look kind of cool. Last time I was on a house hunting trip I was crammed in the 3rd row of a Ford Explorer (I think it was a rental), and it was terrible. I'm over 6' tall and the third row of those have no legroom or footroom. They are only good for kids. If the agent had a minivan I would have been comfortable, but instead it was a small luxury SUV that didn't fit all of us.

Primm

  • Handlebar Stache
  • *****
  • Posts: 1325
  • Age: 50
  • Location: Australia
Re: is it OK to lease a car....
« Reply #21 on: October 20, 2014, 11:35:27 PM »
I wonder if you could hack the system but driving a classic type car.  Pull up in a 60's Corvette or Cadillac that looks good and could have the same effect. Maintenance and MPG may suck but it might be cheaper in the long run. Plus you end up with a cool car not some boring Mercedes ( I hate them)

A local RE agent where I used to live did this - he drove a bright red early 60s Ford (I'm not sure what type). I'm trying to find a picture, but I can't now.

Anyway, it was pretty memorable.

resy

  • Bristles
  • ***
  • Posts: 348
  • Location: West Coast
Re: is it OK to lease a car....
« Reply #22 on: October 21, 2014, 12:49:45 AM »
Sorry, not really adding much here, but I have always been perplexed by this.
Why does the agent absolutely need to drive a luxury car? Its not like it has anything to do with their knowledge of houses, etc.
I know thats the way it works though but I just dont get it.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2914
  • Location: WDC
Re: is it OK to lease a car....
« Reply #23 on: October 21, 2014, 05:12:43 AM »
One other thing to add:  when using work as an excuse for an expensive, luxury car, you need to set rules and restrictions on what other uses the car is used for.
I use my car for both business and personal. I have NEVER allowed food of any type to be eaten in this car.  I don't allow coffee. I do allow liquids in bottles that seal, but not often. My family members have actual fits about not being able to snack in the car. Friends think I'm insane. Well, my car is 8 years old and looks almost new.
Btw, when did it happen that human beings cannot last two hours without stopping at a gas station for a snack?  If you wants to see a bunch of crybabies, try putting a few adults in a car for an hour with no food.
In short, if you cannot institute a rule like this, then you're not really using the car for work. Your just using work as an excuse for a fancy car

skunkfunk

  • Handlebar Stache
  • *****
  • Posts: 1057
  • Age: 33
  • Location: Oklahoma City
Re: is it OK to lease a car....
« Reply #24 on: October 21, 2014, 09:07:02 AM »
Here's the solution! Carry them around in this thing.


rjg

  • 5 O'Clock Shadow
  • *
  • Posts: 83
Re: is it OK to lease a car....
« Reply #25 on: October 21, 2014, 09:37:10 AM »

Leasing is hands down the most expensive way to operate a vehicle.  There is never a case where leasing makes sense. 

Buy a nice used car and save your "lease payments" and periodically upgrade the car. 

You guys should be buying high end cars off lease.  These would be 2-3 years old, dealer maintained, relatively low miles.  They can still be very nice cars.

And in case this wasn't obvious...  You should be paying cash for the cars.

Not so sure that's always true. If you're going to be buying lightly used luxury cars and trading every few years, a good lease deal could come out even or ahead. That's because manufactuters like Mercedes, bmw and Lexus often compete to outsell each other with subsidized leases. Plus they usually include maintenance. It's very possible to come out even or ahead in these scenarios.

FreeWheel

  • Stubble
  • **
  • Posts: 130
  • Location: Chicagoland
Re: is it OK to lease a car....
« Reply #26 on: October 21, 2014, 10:06:26 AM »
Sorry, not really adding much here, but I have always been perplexed by this.
Why does the agent absolutely need to drive a luxury car? Its not like it has anything to do with their knowledge of houses, etc.
I know thats the way it works though but I just dont get it.


They don't. Not everyone is impressed with a pompous fancy pants car. The reason? There are SO MANY of them out there, and even a person of modest means could swing a deal for one if that's what they really wanted.

A fancy new car says little about the person, their financial worth, and most of all, their abilities.

Now if wifey showed up on a fancy bicycle she'd have my business for sure! LOL

 
« Last Edit: October 21, 2014, 10:08:02 AM by FreeWheel »

Sid Hoffman

  • Pencil Stache
  • ****
  • Posts: 743
  • Location: Southwest USA
Re: is it OK to lease a car....
« Reply #27 on: October 21, 2014, 10:13:51 AM »
With a leased vehicle, you can write off the FULL business use percentage of the cost (not just the depreciation).  So you could actually write off the entire cost.

This bears repeating.  Business finances are not the same as personal finances.  Just because an individual needs to spend as little as possible on a car doesn't mean the same rules apply to a business, especially in a two-car family where the business car could potentially be set aside so that all or nearly all of its use is dedicated to the business.

thedayisbrave

  • Pencil Stache
  • ****
  • Posts: 700
  • Location: Raleigh, NC
  • CFO @ My Life
Re: is it OK to lease a car....
« Reply #28 on: October 21, 2014, 10:14:19 AM »
I don't think a luxury car is necessary, but it does need to be reasonably clean and well-maintained in order to project a professional image.  I just bought a house and my agent drove a newer Honda CRV.  I could tell he'd opted for more of the fancy upgrades such as leather seats and a GPS system & it was a really nice ride but not luxury by any means.  The MPG on it is about the same as my little sedan... about 30 MPG combined which is damn good for an SUV.  Looks like brand new they run about $25K, you could find something very slightly used for less I'm sure. 

There are also apps that help track your mileage, I know of some real estate agents that use it.  You obviously have to remember to key it in when you use the car for business purposes, but once that becomes a habit it seems like it would make keeping track of miles easier and more accurate than just guesstimating (for tax write off purposes).

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3308
  • Age: 36
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #29 on: October 21, 2014, 11:14:00 AM »
A friend of mine who's a real estate agent once commented to me that a mini-van is the perfect vehicle.  She said she can carry a whole family of clients out to see a house, and it's appropriate to pull a mini-van up in front of a modest middle-class house or a mansion.  Of course, this was some time back . . . before SUVs made mini-vans out of style, and I don't think SUVs have that same universal appeal -- plus they're quite expensive to keep.

I agree. I wouldn't want to do business with a real estate agent that drives an expensive car, no matter what house I'm buying. Their fees already seem excessive, so no need to waste money that I will eventually be paying them on a car. A minivan made in the last five years would be good, and it can hold plenty of people even adults. They are not expensive and they don't draw attention (positive or negative), but they get the job done. Newer Honda Odysseys even look kind of cool. Last time I was on a house hunting trip I was crammed in the 3rd row of a Ford Explorer (I think it was a rental), and it was terrible. I'm over 6' tall and the third row of those have no legroom or footroom. They are only good for kids. If the agent had a minivan I would have been comfortable, but instead it was a small luxury SUV that didn't fit all of us.

The fees are a set percentage of the house; you will pay the realtor the same amount of money regardless of how they spend it on themselves, and once you pay it to them it's their money.  Why do you care how foolishly they spend their own money, especially when it doesn't affect you?

I would certainly use that information (how they choose to spend their own money) as a factor when I am evaluating their opinion/advice on something, but ultimately their spending habits won't/don't affect me.

Sorry, not really adding much here, but I have always been perplexed by this.
Why does the agent absolutely need to drive a luxury car? Its not like it has anything to do with their knowledge of houses, etc.
I know thats the way it works though but I just dont get it.


It's strictly for image.  A luxury vehicle gives the illusion of success, and people want to do business with successful people.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8428
  • Registered member
Re: is it OK to lease a car....
« Reply #30 on: October 21, 2014, 11:59:48 AM »
A friend of mine who's a real estate agent once commented to me that a mini-van is the perfect vehicle.  She said she can carry a whole family of clients out to see a house, and it's appropriate to pull a mini-van up in front of a modest middle-class house or a mansion.  Of course, this was some time back . . . before SUVs made mini-vans out of style, and I don't think SUVs have that same universal appeal -- plus they're quite expensive to keep.

I agree. I wouldn't want to do business with a real estate agent that drives an expensive car, no matter what house I'm buying. Their fees already seem excessive, so no need to waste money that I will eventually be paying them on a car. A minivan made in the last five years would be good, and it can hold plenty of people even adults. They are not expensive and they don't draw attention (positive or negative), but they get the job done. Newer Honda Odysseys even look kind of cool. Last time I was on a house hunting trip I was crammed in the 3rd row of a Ford Explorer (I think it was a rental), and it was terrible. I'm over 6' tall and the third row of those have no legroom or footroom. They are only good for kids. If the agent had a minivan I would have been comfortable, but instead it was a small luxury SUV that didn't fit all of us.

The fees are a set percentage of the house; you will pay the realtor the same amount of money regardless of how they spend it on themselves, and once you pay it to them it's their money.  Why do you care how foolishly they spend their own money, especially when it doesn't affect you?

I would certainly use that information (how they choose to spend their own money) as a factor when I am evaluating their opinion/advice on something, but ultimately their spending habits won't/don't affect me.

Sorry, not really adding much here, but I have always been perplexed by this.
Why does the agent absolutely need to drive a luxury car? Its not like it has anything to do with their knowledge of houses, etc.
I know thats the way it works though but I just dont get it.


It's strictly for image.  A luxury vehicle gives the illusion of success, and people want to do business with successful people.

Unless they give you a rebate

RH

  • Stubble
  • **
  • Posts: 106
Re: is it OK to lease a car....
« Reply #31 on: October 21, 2014, 12:13:18 PM »
I haven't crunched the numbers exactly, but let's just say leasing a car costs a total of $10K more over 3 years vs owing. So if she 'lost a sale' once every 5-6 years due to the whole 'image' thing sellers and buyers associate with this profession, then leasing is the same as purchasing (since avg. commission is $18K), without all the maintenance hassles, etc...

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3308
  • Age: 36
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #32 on: October 21, 2014, 12:18:12 PM »

Unless they give you a rebate

Which is completely independent of their spending habits and can be evaluated as such.

resy

  • Bristles
  • ***
  • Posts: 348
  • Location: West Coast
Re: is it OK to lease a car....
« Reply #33 on: October 21, 2014, 12:40:42 PM »
One other thing to add:  when using work as an excuse for an expensive, luxury car, you need to set rules and restrictions on what other uses the car is used for.
I use my car for both business and personal. I have NEVER allowed food of any type to be eaten in this car.  I don't allow coffee. I do allow liquids in bottles that seal, but not often. My family members have actual fits about not being able to snack in the car. Friends think I'm insane. Well, my car is 8 years old and looks almost new.
Btw, when did it happen that human beings cannot last two hours without stopping at a gas station for a snack?  If you wants to see a bunch of crybabies, try putting a few adults in a car for an hour with no food.
In short, if you cannot institute a rule like this, then you're not really using the car for work. Your just using work as an excuse for a fancy car
Oh this made me laugh!! Very true, I am one of those full grown cry babies but I also am always upset my car is messy (not luxury, paid off but still)

mpg350

  • Stubble
  • **
  • Posts: 150
Re: is it OK to lease a car....
« Reply #34 on: October 21, 2014, 01:08:13 PM »
I would most likely buy a good 2-3 year old luxury car and keep it for 3 or so years then sell and repeat again.

GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1322
Re: is it OK to lease a car....
« Reply #35 on: October 21, 2014, 01:33:12 PM »
Check with a qualified accountant (which I'm not) but I believe that since the car is used for business,  you can write off the lease as a business expense.  This is a terrific tax deduction and will offset the extra cost of going the lease-vs- buy route.   As long as you can get the deduction then I'd say go for it.

Leasing has been the only way to deduct a car as a bonafide business expense for the last 15 or so years. However, when the lease is up, sometimes the vehicle is available at well under bluebook value. We bought our leased business car this way, as we really liked it, knew its history, & no longer were taking the business expense.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8428
  • Registered member
Re: is it OK to lease a car....
« Reply #36 on: October 21, 2014, 02:26:32 PM »

Unless they give you a rebate

Which is completely independent of their spending habits and can be evaluated as such.

Hate to disagree with you Mr. Nacho, but an agent that spends less on a car has more left over to rebate to me!

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3308
  • Age: 36
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #37 on: October 21, 2014, 02:31:49 PM »

Unless they give you a rebate

Which is completely independent of their spending habits and can be evaluated as such.

Hate to disagree with you Mr. Nacho, but an agent that spends less on a car has more left over to rebate to me!

But can't you determine that on rebate status alone? The proof is in the pudding (the pudding being the rebate).  It's either there or it's not, and while his personal spending habits may influence his decision on whether or not to offer a rebate (or how much of a rebate), ultimately your decision will be based solely on the rebate status.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8428
  • Registered member
Re: is it OK to lease a car....
« Reply #38 on: October 21, 2014, 06:40:37 PM »

Unless they give you a rebate

Which is completely independent of their spending habits and can be evaluated as such.

Hate to disagree with you Mr. Nacho, but an agent that spends less on a car has more left over to rebate to me!

But can't you determine that on rebate status alone? The proof is in the pudding (the pudding being the rebate).  It's either there or it's not, and while his personal spending habits may influence his decision on whether or not to offer a rebate (or how much of a rebate), ultimately your decision will be based solely on the rebate status.

Sure you can, but you snipped the portion I was responding to, that "you will pay the realtor the same amount of money regardless of how they spend it on themselves," which is still untrue. 

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3308
  • Age: 36
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #39 on: October 22, 2014, 08:22:48 AM »

Unless they give you a rebate

Which is completely independent of their spending habits and can be evaluated as such.

Hate to disagree with you Mr. Nacho, but an agent that spends less on a car has more left over to rebate to me!

But can't you determine that on rebate status alone? The proof is in the pudding (the pudding being the rebate).  It's either there or it's not, and while his personal spending habits may influence his decision on whether or not to offer a rebate (or how much of a rebate), ultimately your decision will be based solely on the rebate status.

Sure you can, but you snipped the portion I was responding to, that "you will pay the realtor the same amount of money regardless of how they spend it on themselves," which is still untrue.

No it's not.  Are you going to analyze his grocery bill, utility usage, and entertainment budget to see if it lines up with your values or if you think he is spending that money wisely? No, you are going to look at:

1. the home price (which has nothing to do with him), and the cost will be a fixed percentage of that price
2. if he offers a rebate (and how much)

Both of those factors can (and will) be evaluated independently and on their own merit, and will be known ahead of time before you make the purchase.  Whether he spends his money wisely (according to you) is completely irrelevant.   If his spending does affect the rebate he offers then your decision will be based on the rebate status alone, and not on his personal spending habits.

dragoncar

  • Walrus Stache
  • *******
  • Posts: 8428
  • Registered member
Re: is it OK to lease a car....
« Reply #40 on: October 22, 2014, 08:40:38 AM »

Unless they give you a rebate

Which is completely independent of their spending habits and can be evaluated as such.

Hate to disagree with you Mr. Nacho, but an agent that spends less on a car has more left over to rebate to me!

But can't you determine that on rebate status alone? The proof is in the pudding (the pudding being the rebate).  It's either there or it's not, and while his personal spending habits may influence his decision on whether or not to offer a rebate (or how much of a rebate), ultimately your decision will be based solely on the rebate status.

Sure you can, but you snipped the portion I was responding to, that "you will pay the realtor the same amount of money regardless of how they spend it on themselves," which is still untrue.

No it's not.  Are you going to analyze his grocery bill, utility usage, and entertainment budget to see if it lines up with your values or if you think he is spending that money wisely? No, you are going to look at:

1. the home price (which has nothing to do with him), and the cost will be a fixed percentage of that price
2. if he offers a rebate (and how much)

Both of those factors can (and will) be evaluated independently and on their own merit, and will be known ahead of time before you make the purchase.  Whether he spends his money wisely (according to you) is completely irrelevant.   If his spending does affect the rebate he offers then your decision will be based on the rebate status alone, and not on his personal spending habits.

I didn't say anything about spending money wisely, nor did I say your decision would be based on his personal spending habits.  I'm saying that how a realtor spends money (i.e., spending 100% of the commission vs. 90%) will affect whether he can offer a rebate, and thus the amount you will end up paying.

Tetsuya Hondo

  • Pencil Stache
  • ****
  • Posts: 503
  • Location: 1960's Tokyo on the Bad Side of Town
Re: is it OK to lease a car....
« Reply #41 on: October 22, 2014, 09:06:52 AM »
With a leased vehicle, you can write off the FULL business use percentage of the cost (not just the depreciation).  So you could actually write off the entire cost.

This bears repeating.  Business finances are not the same as personal finances.  Just because an individual needs to spend as little as possible on a car doesn't mean the same rules apply to a business, especially in a two-car family where the business car could potentially be set aside so that all or nearly all of its use is dedicated to the business.

This. There is a wall between my business and my personal finances. For my business, I make decisions based on what is the best for the business, period.

I use a different calculus for my personal finances.

That said, I use my personal car for business (I have an LLC, S-Corp) but pay myself a mileage reimbursement for business use. In my calculations and discussions with my accountant, this seemed to work out the best for me.

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3308
  • Age: 36
  • Location: Madison Heights, Michigan
Re: is it OK to lease a car....
« Reply #42 on: October 22, 2014, 11:42:12 AM »
I didn't say anything about spending money wisely, nor did I say your decision would be based on his personal spending habits.  I'm saying that how a realtor spends money (i.e., spending 100% of the commission vs. 90%) will affect whether he can offer a rebate, and thus the amount you will end up paying.

No it was m8547 that said:

"I agree. I wouldn't want to do business with a real estate agent that drives an expensive car, no matter what house I'm buying. Their fees already seem excessive, so no need to waste money that I will eventually be paying them on a car."

To which I replied that it's irrelevant how he spends his money.  His spending habits may influence whether he offers a rebate, but they may also not.  He could offer a rebate despite driving a hummer (or 3 of them).  He may also offer no rebate despite being FI.  Ultimately the only thing that should factor into your decision is whether he offers a rebate or not, and his spending habits are completely irrelevant. 
« Last Edit: October 22, 2014, 12:11:55 PM by frugalnacho »

Dicey

  • Walrus Stache
  • *******
  • Posts: 9729
  • Age: 61
  • Location: NorCal
Re: is it OK to lease a car....
« Reply #43 on: October 22, 2014, 12:10:14 PM »
Most RE firms pressure their agents to drive nice cars, for the sake of the company's "image".

Here's a way to lease your cake and eat it, too. Lease a mid-range vehicle (nice, but not over the top). Baby it and stay within the mileage limits. Write it off with the help of your very capable CPA. When the lease is up, buy it out and use it for your family vehicle. Lather, rinse, repeat as necessary. This way you get the best of both worlds. BTW, a Honda Odyssey or Toyota Sienna are extremely comfortable for hauling clients around. If you're a Realtor and want to end up with a new-ish minivan as a family car, I'd start out with a leased one for your business. Just don't confuse the two before the lease is up. Clients do not want to see ground-up goldfish on the floor mats.

dycker1978

  • Pencil Stache
  • ****
  • Posts: 768
  • Age: 40
  • Location: Regina, Saskatchewan, Canada
Re: is it OK to lease a car....
« Reply #44 on: October 22, 2014, 12:16:13 PM »
Check with a qualified accountant (which I'm not) but I believe that since the car is used for business,  you can write off the lease as a business expense.  This is a terrific tax deduction and will offset the extra cost of going the lease-vs- buy route.   As long as you can get the deduction then I'd say go for it.

You can alternatively write off the depreciation on a purchased vehicle.

Not as effective here... leasing is a good option sometimes in this case