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| to lease a truck or not??? http://mudmotortalk.com/mmt_v2/viewtopic.php?f=7&t=13897 |
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| Author: | netman [ Thu Nov 18, 2010 9:43 pm ] |
| Post subject: | to lease a truck or not??? |
I own a small business and operating in the black. My accountant has advised me to spend some money on my business for tax purposes. He asked if there was something I needed and a truck came up. He said to lease one as it was 100 percent tax deductable. I have never leased anything in my life just bought stuff. I have no clue as to leasing and what the advantages are. Does anyone here lease a truck through their own business? I know alot of people drive lease vehicles. Looking for the in's and out's. Is there a business advantage for leasing over buying or vice versa? My next question is about hiring workers but we will save that after this leasing issue. Thanks Randy |
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| Author: | autogateman [ Thu Nov 18, 2010 9:52 pm ] |
| Post subject: | Re: to lease a truck or not??? |
i looked into it pretty hard, and if 1. you dont drive more than the alotted miles and 2. the truck wont be put to hard use, yes. it can be a good deal. it does cost a little more in the long run, depending on the down payment, but you get a new truck every few years when the lease is up. they also give you the option to buy it after the lease, but that is usually not worth it. the only reason i didnt go with a lease is because im pretty hard on my trucks and ive been told they hit you pretty hard at the end of the lease for 'damages' if it appears to have been used more than they think you should. just my .02 |
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| Author: | fowlplay [ Thu Nov 18, 2010 9:55 pm ] |
| Post subject: | Re: to lease a truck or not??? |
well, i don't own a company, but i work for the 3rd largest chemical company in the world, and we lease all of our vehicles. one of the upsides to leasing is that there is a program called ari, they will take care of all maintence records, for when the lease is up they have any info that the vehicle has had done to it. it is a set price we go on a lease for a diesel at 125,000 miles that pickup gets sent back and replaced with a new one for the same payments, the only downside is that if you would want to keep the vehicle, the payoff is due at the time you hit that magic # on the milage. we use alamo leasing, i believe. it is a pretty high payment, i just got my new truck 2011 f-250 4 door 4x4 and the payment is 1089/mth. i would say that the majority of the customers i deal with the companys all go with lease vehicles, rather than buying them outright. due to the tax reasons, easier on the books. autogateman is right, i know if you are hard on them it probably won't be worth it, a tailgate is 1022.00 to alamo if its banged up, they do go over them with a fine tooth comb, when its all said and done with. |
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| Author: | Wilson [ Fri Nov 19, 2010 8:57 pm ] |
| Post subject: | Re: to lease a truck or not??? |
Since I know this small business is not your full-time job unless you're not doing the police thing anymore, I would say you're not writing off enough stuff. The leasing thing depends on how long you usually keep your trucks and exactly what kind of truck you're buying. I usually only recommend leasing when the depreciation on a purchased auto would be limited, like on an SUV or car. If leasing costs more, it's usually not a good idea to lease unless the depreciation is seriously limited. For example I have recommended leasing when my client wanted to purchase or Corvette, but I tell the same client to buy his full-size trucks. The trucks need to have a GVWR of over 6,000 pounds and have a 6 foot bed. Most full-size trucks do. With Section 179 depreciation, I can write off however much we want the first year and control the depreciation in the following years. Most of my clients want to know how to write off the most they can in the current year. Purchasing allows you to do that because in the first year you can write off more than the amount of cash you spent (assuming you finance it). This will catch up with you in future years but we usually figure out another way to continue pushing off income into future years. One thing your accountant was getting at was to spend as much money as possible before year-end. Meaning if you need new tires or a new computer, buy it in December instead of waiting until 2011. Pay all your bills before December 31st and pre-pay anything you can. |
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| Author: | take'emgator [ Fri Nov 19, 2010 9:42 pm ] |
| Post subject: | Re: to lease a truck or not??? |
Lease are for people that don't really use there vehicles for towing and use it at the minimal just to get a new truck every year, the guys are right about the alotted mileage and if you go over the mileage, when you go to trade it in they'll hit you with a whats called a balloon payment for the overage on miles. Friend of mine just went through this same situation. You can lease no problem but be cautious of the mileage thing and the damages. If you are doing it for tax purposes i would just buy the thing out right and then claim it as company use at the end of the year cause you can write off your mileage also. Just some Food for thought! |
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| Author: | netman [ Sat Nov 20, 2010 5:57 pm ] |
| Post subject: | Re: to lease a truck or not??? |
Thanks for the replys/information. Wilson you are right on. I am still a LEO however I own a business that is full time too. Thanks I do appreciate your reponses. Randy |
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| Author: | netman [ Sat Nov 20, 2010 6:02 pm ] |
| Post subject: | Re: to lease a truck or not??? |
Oh I forgot to mention that I am gonna buy rather than lease a new truck. Thanks again. Randy |
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| Author: | Wilson [ Sat Nov 20, 2010 10:43 pm ] |
| Post subject: | Re: to lease a truck or not??? |
Good choice. One thing though regarding Take'emgator's post, you can't write off both mileage and actual expenses. It's one or the other. In your case it would be actual expenses because you are claiming depreciation. That means you take all of your auto expenses like fuel, repairs, interest, depreciation, etc. and multiply that times the percentage you use it for business. I would not hesitate claiming 80-90% business use and maybe even 100% if you really only use it for business. Run anything auto related through your business checking account so that you can keep track of all of your expenses. It makes it difficult at the end of the year if some expenses were paid from your personal account and some out of your business. One other thing you can look at is claiming a home office deduction. It would allow you to write off a small portion of most of your house expenses like repairs, utilities, etc. Ask your accountant about it if he hasn't mentioned it already. |
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| Author: | netman [ Sun Nov 21, 2010 7:01 pm ] |
| Post subject: | Re: to lease a truck or not??? |
Wilson your right on! My wife has a licensed home daycare so the home is already in the mix. My barn is where my business is ran is now in the mix too. Thanks for your help. Randy |
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