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Dburd61
12-07-2004, 12:26 PM
I wanted some advice weather I should Lease or buy a new truck next spring ,Would I be able to write off the payments if I buy the truck or not,Any advice would be helpful.

forgop
12-07-2004, 01:06 PM
I'm not sure, but I think it wouldn't matter if you bought or leased. With a lease, just keep your miles down or you'll pay through the nose at the end. I have leased 3 vehicles in the last 5 years or so and I always go with 15k miles a year. Many people just go with the advertised mileage and never realize you can buy some miles ahead of time. It's only like $5 more a month and those extra 3k miles sure come in handy. Well worth it IMO.

Travis Followell
12-07-2004, 07:28 PM
I can't understand why someone would make monthly payments on a vehicle just to return it when the lease is up. Makes no sense to me. You could spend just a little more than you would leasing and you could own a new truck and also would probibly be a tax write off.

DennisF
12-07-2004, 08:05 PM
If you buy the truck, you can depreciate it over a 5 year period. If you lease it you can write off the payments each year.

Leasing is better if you don't plan on keeping the truck more than about 3 years and you can keep the miles under 12,000 each year. At the end of the lease you turn in the truck and either lease or buy another.

RedWingsDet
12-07-2004, 08:47 PM
I can't understand why someone would make monthly payments on a vehicle just to return it when the lease is up. Makes no sense to me. You could spend just a little more than you would leasing and you could own a new truck and also would probibly be a tax write off.

unless if you plan on buying it, you can lease it for 3 years, and buy it at the end. My step dad has an 03 dakota, and its only like $122 a month, its an SXT extended cab, its real nice, not a 4x4 and not a v8, but its nice, gets good gas mileage. and that is $122 a month with no money down, and its only 7k to buy at the end.

But then again, this isnt a work truck, just his daily driver.

Just some food for thought, and why some people lease, because they probably get it real cheap and can buy it real cheap. Hope this Helps.

Merry X-Mas!

forgop
12-08-2004, 10:31 AM
I can't understand why someone would make monthly payments on a vehicle just to return it when the lease is up. Makes no sense to me. You could spend just a little more than you would leasing and you could own a new truck and also would probibly be a tax write off.

Why do people buy? Look how much it depreciates the minute you drive it off the lot. I just leased a 2004 Envoy in February that goes for over $32k. I did a 4 year lease this time and monthly payment comes out to $325. Total payments equal $15,600 and the residual purchase price is about $15k. I can drive the same vehicle now and pay less per month driving it and have to worry about no maintenance other than changing oil and rotating tires if I always lease. Also, when you buy a vehicle that is say $30k, you pay interest on that entire amount for the duration of the loan. With a lease, you pay interest only on the selling price minus the residual. Trust me, there are plenty of good reasons to lease as I just traded in a car that I was $8k in the hole on in June to get into a 2 year lease to get out from all the negative equity. If you can manage your miles, leases are good. Otherwise, they're bad.

cgland
12-08-2004, 11:38 AM
We lease ALL of our vehicles.....it makes sense if you run a truck nonstop for 10 months out of the year. Our trucks get beat up (not physically, but mechanically) so at the end of the lease you hand the truck back and get a new one. It saves money in the long run as far as maintenance and repairs plus it really boosts your company's image if you always have nice, new trucks. The only advantage I can see about buying a truck is no payments after 5 years, but that's when built in obscelescence(?) takes over and you spend your monthly payment on maint. Just my .02 Everyone has a different opinion on this matter.

Chris

Evan528
12-08-2004, 12:13 PM
Im a big fan of leasing. I own my work truck but this time around I leased my personal/estimate truck. Im the kind of person who gets tired of vehicles quick so the idea of getting a new vehicle every few years apeals to me. I also could not justify a 7 or 800 dollar a month finance payment considering vehicles depreciate as fast as they do.By By time my trucks needs new tires, brakes and other wear items it will be ready to trade in and wont be my concern. :waving:

Moguy
12-08-2004, 01:39 PM
This link may also be of some use
http://www.toolkit.cch.com/text/P04_7010.asp

forgop
12-08-2004, 02:46 PM
Another way to think of it is this-people get so hung up about putting money down on buying a car. What value is it for you to put money down on a depreciable asset? This even came from a finance manager at a car dealership!!!

Precision
12-08-2004, 08:32 PM
Talk to your accountant. Tell him all your personal variables. He will run the numbers and tell you where it fit for you. Do you need the long term depreciation to offset profits, do you have enough cash flow to make the purchase work, will you get charged back cause you beat up the vehicle, lots of variable before you know what is right for you.

YardPro
12-08-2004, 09:02 PM
takes over and you spend your monthly payment on maint. Just my .02 Everyone has a different opinion on this matter.

Chris

i disagree with this one.

we buy new as well. with the depreciation we get it's a better deal.
you buy a $30 K truck you get the initial tak relief (now it's 50% of the purchase price),and then you get the 20%/year ( additional) for depreciation.
the truck then becomes an asset.

you lease it you only deduct the payment,

next thing is, if in 5 years you're spending $8K/year on repairs you need to rethink how you maintain/use your trucks.

We get 10 years out of standard little s-10's. they are worked well beyond what they were designed for.

if you drive 25K miles per year, 5 years is only 100 K. I don't see how a HD truck is worn out by then.

the other thing is that you are limited on the mileage (usually 18K/year). go over and it's $.15/mile or more.
you are also liable for dammage incurred.
the interiors of ours get beat up more than the exteriors. Someone always gets in with pruners, etc in thier pocket and tears the seat.
this is all fixed at dealership rates.



BUT to each his own. it may work you, but in our case it's not the ideal.

YardPro
12-08-2004, 09:10 PM
i have leased before and got reamed, so i am a little biased

beransfixitinc
12-08-2004, 09:26 PM
What is the usual charge for removing things like lettering on the vehicle at the end of a lease period? Like, you get your vehicle lettered to your business with your name, or like what you all do here... how does that factor in as an additional cost in the end?

YardPro
12-08-2004, 10:59 PM
that was one of the issues we had.
we leased a company car to try things out.
the wife drove it. we had our logo on the side.
they claimed they would have to repaint $750.00 (all they did was buff it out)
on the way home from shopping some bleach spilled on the carpt in the back floorboard...
$1500.00
we were over 10K on miles
$350.00
someone hit us in a parking lot. the vehicle was repaired, but they considered it a value decreasing incident since it would show up on carfax
$500.00

there were a few other things as well.

all in all when the car was turned in we owed them several thousand.

it was a really bad deal

sildoc
12-08-2004, 11:19 PM
This is one of those thing that I hoooo hummmmed over for about 3 months this spring. I talked to my accountant.
Pros and cons to both.
Summed up Leasing you get a new vehicle every 3-5 years. That is the pro. Wont start with the cons on different costs that they call depreciation but is actually normal every day wear and tear.

Buying. You can either depreciate over 5-7 years. You can either take 50% up frount or the sum of % over the years....
Now you can also wright off payment over period of loan...
Say you have a 6 year loan. Your payment is 500 a month. You wright off either 37Cents per mile pending what it is for the year OR>>>>>>>
You wright off 500 per month and Fuel, Oil, Maintenance and other misc.
At the end of 6 years you have X amount of equity in that vehicle. You then turn it in for a new vehicle and start all over. OR you can keep and wright off all fuel, Maintenance, and misc. Off.

Either way wether you lease or buy you have to either pick wrighting off payments, fuel, maintence, and misc. Or wright off Milage.

Now if you are buying a used somewhat cheaper vehicle for work you might think of milage over the payment/fuel/misc.

YardPro
12-09-2004, 01:42 AM
don't forget that until the end of this year you get an ADDITIONAL 50% of cost tax break . this is in addition to any depreciation.

i agree that leasing can be advantagous to some. Have you been leasing long? have you turned in any trucks yet. If so, have you had any mileage overages or dammage charges?
that's what killed us.

the other thing i did not like is that after 5 years we trade or sell the vehicle. this will contribute to the purchase of the new vehicle. with a lease, you just keep on paying.

we actually keep our vehicles much longer than the payoff. after they are paid off they are still in good condition, so we use the money from the payment for some other capitol expendature.

HOOLIE
12-09-2004, 02:41 AM
What is the usual charge for removing things like lettering on the vehicle at the end of a lease period? Like, you get your vehicle lettered to your business with your name, or like what you all do here... how does that factor in as an additional cost in the end?

My old boss leased 2 trucks back in the early 90's and got nailed for the lettering. I'm not sure how much, but he really got nailed for pulling a trailer. I don't know if today's leases are structured this way, but in his leases (and he didn't read the fine print) they tacked an extra 50% on the mileage for towing a trailer. He about s*** a brick when the dealer informed him of this!

HOMER
12-09-2004, 08:01 AM
At the end of my lease on my truck.............I wound up buying it. I had went 30,000 miles over my mileage limit, it had a dent in the bed and although it wasn't a rolling wreck, it still wasn't in good enough shape to escape all those charges they wanted. I refinanced the truck at the price they had quoted in the buyout agreement. In the end I will have 7 years invested in this truck, about the same as I would if I had done a long finance.

Be careful and plan ahead, if your gonna drive it a lot like I did don't lease it.