Should you buy or lease your next vehicle?

Are you in the market for a vehicle for your business?  Before you decide between leasing and buying here are a few things to consider:

  1. Down payment - If you’re low on cash, some leases don’t require a down payment, but some car loans do.
  2. Mileage - How much will your business vehicle be driven? Leases have mileage limits and you’ll have to pay more if you want additional miles.
  3. Ownership - When you’ve paid off a vehicle loan, the car is yours to keep, sell, or trade in. At the end of a lease, you return the vehicle and get another one.
  4. Taxes - Some lease payments are tax-deductible, based on the percentage that you use the vehicle for business. Generally, when you purchase a vehicle both interest and the cost of the vehicle are eligible to be deducted on taxes in accordance with IRS depreciation methods and rules. You will want to consult an expert.
  5. What the vehicle will be used for - If it’s important for your business to always have a newer car to drive clients around in, a lease could work better for you. But if your vehicle will be on work sites where it could easily be scratched or damaged, then ownership might be the better option.

We can help

You can count on our Business Advisors to provide you with unbiased advice. As your partners in business, we want to work with you to find the right solutions and improve your company's financial position. Call 1-800-288-3425 or stop by one of our branch offices today.