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is buying a new truck financially the right choice for me?

Discussion in 'Business Operations' started by grass disaster, Jun 7, 2009.

  1. grass disaster

    grass disaster LawnSite Silver Member
    Posts: 2,583

    i'm part time lco...seems like 2 full time jobs
    i have a 2001 chevrolet hd ext. cab which i bought with 50,000 for $20,000 5 years ago.

    it's fully depreciated this year.

    it's been a fantastic truck no problems, i have 82,000 on it now. so i don't put on many miles as you can see. it's just a work truck. i have a car for going to my f.t job

    i got kinda beat up on income taxed last year. this year is tracking to be the same as last year(income speaking)

    i lucked out and won a big contract this year. i lost about 1/2 my residential work though.

    i forcast this year to be my last good year. next year i plan on being slow i'm getting tired of all the lowballers. the market's just flooded with lco now days.

    would it be a good idea to get a new truck this year. i'm thinking a new truck is what 30k i could probably get 10k for mine.
  2. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    now is the time to buy.... dont forget you can write it off
  3. grass disaster

    grass disaster LawnSite Silver Member
    Posts: 2,583

    yes i know i can write it off. i got that figured out :hammerhead:
  4. willretire@40

    willretire@40 LawnSite Bronze Member
    from VA
    Posts: 1,387

    It is only a tax advantage if you are paying cash for it. If you finance you are still paying interest on it. How much will you be able to right off each year with the new truck?
  5. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Posts: 7,603

    I'm not really sure what your question is? If you're projecting paying a boat load of income tax, it may make sense to buy the truck and take section 179 to get your income down to a manageable level. (if you're planning on buying a truck in the near future anyway) It may not make sense however to spend $20,000+ on a trade in just to save $2,000 in taxes. The tax write off only recovers part on the cost. Make sure the truck does not fall under the "luxury automobile" limitation. Most full size pick ups don't.
  6. JDUtah

    JDUtah LawnSite Silver Member
    from UT
    Posts: 2,636

    run some numbers and see what tax bracket it will put you in...

    numbers don't lie... it's the guessing them that is the hard part.
  7. Stillwater

    Stillwater LawnSite Platinum Member
    Posts: 4,834

    I useally agree with you from your other posts until this one...
  8. LouisianaLawnboy

    LouisianaLawnboy LawnSite Silver Member
    Posts: 2,199

    Simple Math

    Amount of $ saved by not paying taxes = Truck depreciation

    If you can afford it, buy a slightly used truck. Let someone else take the depreciation.
  9. JDiepstra

    JDiepstra LawnSite Bronze Member
    Posts: 1,511

    No it does not sound to me like it is a good idea.

    For one you said you have no problems with the truck. Sounds like a keeper.

    Two, it should be paid off by now correct? You will not come out ahead by having a new truck payment even though you can depreciate it. It will cost you more.

    Three, you said you expect this to be your last good year. Why get yourself locked into payments for the next 4 -5 years if you don't expect anymore good years?

    It is never smart to "buy" deductions.
  10. grass disaster

    grass disaster LawnSite Silver Member
    Posts: 2,583

    what if i paid it off right away and deduct it all in one year?

    i just thinking of getting rid of it before i blow a tranny or blow a motor.

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