Should I buy or lease my car?

Advantages of Leasing (The following advantages of leasing apply primarily if you use your automobile for more than 50% of your total miles driven for business purposes. This generally excludes 'commuting' to and from your primary place of business):

• Deductability of most of the monthly lease payment (this is especially good for expensive cars)
• Lower up-front payment is required
• No need to 'sell' or 'trade-in' the car at lease termination

Disadvantages of Leasing:

• All leases come with mileage restrictions which, if exceeded, can be costly
• It is generally very expensive to terminate a lease before the original lease term is complete
• Leasing is generally more costly than buying
• During the lease term, there is no equity in your vehicle.
• At the end of the lease, the purchase option is generally not desirable as the contractual purchase price may be higher that the automobile's market value.

Advantages of Buying:

• You generally have some equity in your vehicle and, if necessary, you could sell it and have money available after paying off your loan
• You can sell you car at any time
• There are no mileage restrictions, but excess mileage may affect you car's value

Disadvantages of Buying:

• You are usually required to pay a larger down payment when buying a vehicle
• Your tax deduction may be severly limited for your business use, depending upon the value of the automobile. Restrictions begin at costs exceeding $15,300. (These restrictions do not apply to 'alternative fuel vehicles' and vehicles weighing more than 6000 pounds)
• You are faced with the prospect of having to sell you car privately (and dealing with potential buyers) or trading your car into a dealer, usually at a value far below market value