Should you buy or lease your next vehicle?

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.

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