Leasing New vs. Buying Old

[HacksawJimThuggin]

Not to fret, this isn't your typical leasing vs. buying thread.



But I've procastinated on getting a new car forever, because frankly, I don't really give a damn about cars like that. Figure I'll probably cop something nice for myself as a bday present though. Trying to decide between the following:



BUYING: A Certified Pre-Owned 2009 BMW 528 (extended warranty) with 42K with the sticker price at 22,000.



LEASING: A 2014 CLA Benz/328i/IS250/Infiniti Q50 that'll be mid-high 30's






In Florida, I believe on leased vehicles, tax is assessed on the monthly payment rather than the price of the car. My commute to work is about 28 miles, so I'd have to go with 15K miles/year if I lease. That is obviously a pro for buying. But what makes this situation a little bit more complicated in terms of making a decision is that I own my own business so I would be able to write off a portion of the monthly payment if I leased it as well as the mileage for wear and tear.


Anyone got advice for me? If I do decide to lease, which one of those cars might be the best choice? Thanks.

 

[BlvdBrawler]

Not to fret, this isn't your typical leasing vs. buying thread.



But I've procastinated on getting a new car forever, because frankly, I don't really give a damn about cars like that. Figure I'll probably cop something nice for myself as a bday present though. Trying to decide between the following:



BUYING: A Certified Pre-Owned 2009 BMW 528 (extended warranty) with 42K with the sticker price at 22,000.



LEASING: A 2014 CLA Benz/328i/IS250/Infiniti Q50 that'll be mid-high 30's






In Florida, I believe on leased vehicles, tax is assessed on the monthly payment rather than the price of the car. My commute to work is about 28 miles, so I'd have to go with 15K miles/year if I lease. That is obviously a pro for buying. But what makes this situation a little bit more complicated in terms of making a decision is that I own my own business so I would be able to write off a portion of the monthly payment if I leased it as well as the mileage for wear and tear.


Anyone got advice for me? If I do decide to lease, which one of those cars might be the best choice? Thanks.

With that long of a commute, I'd strongly recommend against leasing. Doing the math...

28 miles to work yields a 56 mile daily round trip commute. On average, there's 22 work days in a month, x12 months a year for a total of 14,784 miles per year just going to and from work. That doesn't leave hardly any room for you to drive anywhere else.

That 528 is a great cruiser, but with that commute you're gonna burn through that warranty FAST so I'd just be sure that it's reliable before committing to something as potentially expensive as that if you're gonna own it for a while.

Good luck, breh.

 

[BlvdBrawler]

Addendum: Are you planning on staying at this job for a while? If not, I'd probably just buy a bucket that gets good gas mileage and once I had a shorter commute, look for something more luxury oriented or fun.

What are you driving right now? Is it reliable still, or are you just bored with it?

 

[HacksawJimThuggin]

I know I'd go over the miles with a lease, but I'd be able to deduct the mileage I drive to work at a rate of 56.5 cents per mile, along with a percentage of the lease payment (whatever percentage of the time I use the car for business). So I think the mileage part would equal out considering I"m essentially deducting $15 in mileage on the way to work, and $15 on the way home.

So that's $30 a day. If the tax bracket I fall in is 25%, I'm essentially saving $7.50 a day just in miles by leasing over buying.

Not to mention the deduction of the actual lease payment. So if I put zero down on one of those cars above, I'm assuming my lease would probably be around $400. If I use my car for work 70% of the time, that's $280 that's tax deductible. 25% of that is $70. So in actuality, my lease payment would only really be costing me $330/month instead of $400.

Currently I drive a Civic but it's over 100K. I've had money to get a new car for a minute now, just been putting it off for whatever reason, but I figured I'd get me something for my bday.

As far as the car I'd buy, the 528 is CPO'd by BMW, so they essentially tested it and gave it their stamp of approval to have the warranty extended to 100K.

Here's the one I'm looking at:

Cars for Sale: 2009 BMW 528i Sedan in Miami, FL 33137: Sedan Details - 344933807 - AutoTrader.com


I'd also get free maintenance for that period, which is huge as well. Plus the car is 3 years old, probably won't depreciate too much more, so even if I just drove it for a couple of years, I doubt I'd be too upside down on the car.



Still don't know what I'm gonna do, shyt could really go either way at this point lol

 

[ThumpDaddy]

Looking at those numbers I wouldn't lease. That BMW looks nice but at the same token those miles is gonna take you out of that warranty quick. I would get a DD to drive thru the week. Then you can choose to lease or buy the BMW because the DD will take all the miles. It's up to you though. As far as the cars that you mentioned that you want to lease, the best thing to do is to test drive them all. A couple of those cars haven't even came out yet so you got plenty of time to decide what you want to do. Good luck and whenever you decide send some pics.

 

[HacksawJimThuggin]

Looking at those numbers I wouldn't lease. That BMW looks nice but at the same token those miles is gonna take you out of that warranty quick. I would get a DD to drive thru the week. Then you can choose to lease or buy the BMW because the DD will take all the miles. It's up to you though. As far as the cars that you mentioned that you want to lease, the best thing to do is to test drive them all. A couple of those cars haven't even came out yet so you got plenty of time to decide what you want to do. Good luck and whenever you decide send some pics.

To be honest, I'm not looking for a long term solution. Lease or buy, probably only gonna keep whatever I end up purchasing for 3 years. Figure by then, either my lease is gonna be up, or the BMW mileage threshold for the extended warranty will be approaching and I'll sell it and get something else at that point.


And yea, I plan on buying something in September, so I have a little while to decide.

 

[unit321]

If you know you can itemize deductions for a lease and mileage on a vehicle for business use, you can also itemize deductions for buying the car and mileage on a vehicle that you purchase. You can apply deductions on depreciation in following years too.

Check Consumer Reports too if you do decide to buy. Some 5-series had problems up the gazoo, while other years 5-series didn't have problems.

 

[HacksawJimThuggin]

If you know you can itemize deductions for a lease and mileage on a vehicle for business use, you can also itemize deductions for buying the car and mileage on a vehicle that you purchase. You can apply deductions on depreciation in following years too.

Check Consumer Reports too if you do decide to buy. Some 5-series had problems up the gazoo, while other years 5-series didn't have problems.

From what I've read, it was mostly the 535's that had some kind of fuel problems. The 528's were fairly dependable. I knew I could also deduct mileage on a purchased vehicle, just not sure how to deduct the depreciation value. Do I go by the KBB each year or do I have to get it "appraised" or something?

 

[unit321]

From what I've read, it was mostly the 535's that had some kind of fuel problems. The 528's were fairly dependable. I knew I could also deduct mileage on a purchased vehicle, just not sure how to deduct the depreciation value. Do I go by the KBB each year or do I have to get it "appraised" or something?

I'm not an accountant but I can take a look at the tax law. BRB you lazy boob. :cpr:

 

[unit321]

just not sure how to deduct the depreciation value. Do I go by the KBB each year or do I have to get it "appraised" or something?

Tax Topics - Topic 510 Business Use of Car

I believe you would use standard mileage rate method only and not both standard mileage rate method and actual expense method.


------ Depreciation info.

Tax Topics - Topic 704 Depreciation

I just edited all that extra stuff. I'm not sure if you would use straight-line depreciation or not.

 

[HacksawJimThuggin]

Here are the actual depreciation numbers for 2013, in case anyone else is interested:


IRS Issues 2013 Vehicle Depreciation Deduction Limits | AccountingWEB



Looks like I'd be able to save about $45/month in depreciation if I chose to buy a pre-owned vehicle, assuming I used it 75% for business.

 

[Ethnic Vagina Finder]

Why pay 22k for a 4 year old high maintenance car when you can buy a brand new car for around the same price?!!!!

 

[Hahahaha]

Why pay 22k for a 4 year old high maintenance car when you can buy a brand new car for around the same price?!!!!

Buying a preowned coming off a lease generally means the car was taken good care of and has extremely low miles on it. For some this would be the only way to afford a luxury brand.

Plus in 2 years would you rather have a 5 year old BMW or a 2 year old Toyota Corolla?

 

[HacksawJimThuggin]

Why pay 22k for a 4 year old high maintenance car when you can buy a brand new car for around the same price?!!!!

basically what the dude above me said. But also, it's certified pre-owned so I'd be getting the extended warranty with it. And cars depreciate the most in the first 3 years, so I'd rather have a used BMW that I probably have equity in 3 years from now when I'm going to sell it rather than being upside down on a 2013 Honda Accord/Altima/Sonata 3 years from now.

This is basically gonna be a stop gap for me, I don't plan on having whichever car I end up purchasing for more than 3 years, regardless.

 

[Ethnic Vagina Finder]

Buying a preowned coming off a lease generally means the car was taken good care of and has extremely low miles on it. For some this would be the only way to afford a luxury brand.

Plus in 2 years would you rather have a 5 year old BMW or a 2 year old Toyota Corolla?

in your post and I quote "I don't really give a damn about cars like that" If that's the case you can buy a quality domestic or foreign for 22k