I guess what I was getting at is many businesses lease their vehicles as do individuals who write their lease off to the business. If the lease opportunities dry up, what will that do to sales. CPO cars could also become a thing of the past or at least until the financial crisis passes.

Yes I realize the high end market hasn't been hit yet, but isn't just a matter of time?[/quote]

I would assume so, that sales will be down, but that would have been inevitable with the current state of the economy, and impending recession. I think that since leasing may end, that business will have/want to still purchase high end vehicles for their owners, and will find some sort of write off for those cars. So leasing ending shouldn't hurt sales too much, but the eocnomy in general will.

Also, can someone explain the tax benefits for corporations and leasing? I would like to look into the for my next car. I didn't want to lease, but if theres a good sised write down, it may make sense.

-Canon

 

Here is a thumbnail version... Many corporations, business owners and some employees lease their vehicles and deduct the business-use percentages. If your payment is $3,000/mo and you use the vehicle 80% for business, then you would deduct $2,400/mo ($3,000 x 80%). Assuming a marginal federal tax rate of 35%, you would save $840/mo in federal taxes.

In many circumstances it is advantageous to lease a vehicle because the allowed deduction is greater than the maximum deduction allowed for purchased vehicles, with the notable exceptions being heavy SUV's and heavy trucks.

For expensive cars, leasing generally offers the greatest tax advantages but there are some potential negatives to leasing too. In the end, it comes down to your individual situation and goals.

 

Thanks, I figured it was something along those lines. But I didnt know about the 80% thing, where you prorate the deduction based on buiness vs. personal usage. Are there minimum's or maximums to this leasing? I heard somewhere theres a 100k minimum gross on the business, but didnt know if that was true.

Now is there anyway to deduct any part of purchase interest or payment, if it is for business use. Ofcourse using the similar prorate.

 

If you keep at 75% you'll be fine.
I just leased my wife a boxster today, great rate pfs (she's extremely hard on cars, so she's better off leasing).

 

^^^Better start a thread with some pictures!

 

Right thats absloutely correct for leasing, but does that refer to the financing as well. Lets say I purchase the car (95k est.), and put around 30k, finance the rest, would any part of that payment be legally deductable as business expense?

 

You have to capitalize the asset and depreciate over time. Versus a direct expense. So no - not really.

 

I think if you read between the lines you'll see that its not far fetched to assume that leasing was undergoing some of the same practices that led to the fall of the mortgage market. This is just fall out from that, coupled with a poor economy where auto sales are rightfully down. The media needs to turn a profit with some sort of crisis so they found a new area of the economy that they can now attack because obviously the home mortgage crisis is old and tired. There's really no panic here and it wont change the majority of the way cars are financed by the premium/luxury manufacturers.

Credit is a good idea and works well in practice. Some of the institutions just got a little bit too liberal with things and the government didnt have enough regulations to keep them in check so things went haywire. It exploded, its going to settle down, and continue along as it has in the past. Its the same as with any other bubble.

 

Thanks for the advice, I'll prolly just call the accountant when it comes time to buy, that would make the most sense. Oh and landenburg is really close to me, ever driven on that little connecting road from 896 to Possum Park Rd? Nice twisties back there.

 

My car should be coming in soon and I'm considering financing, if you don't mind sharing (or pm me if you like) how good were the rates from Porsche?
Also, a little off topic but, do you think I should look for a discount off MSRP due to state of the economy and the auto market, or will my dealer laugh at me if ask for a discount??

 

All around where we live there are some great roads. Good Hope Road, Chambers Rock etc etc. I actually work in Hockessin - so follow good hope almost every weekday.

Do you have a TT yourself ?. what color ?. so I can watch out for it. Or are you going to purchase one ?. which dealer ?. winner porsche ?.

 

I am actually talking about Chambers Rock, I found that road a year or so ago, and passed it along to a few of my friends at UD. I'll def look up Good Hope Road, and scope it out first. Where do you work in Hockessin, is it on 7 where that Kaz Denistry office is... always a couple of sweet rides out there?

But no I do not have a TT (yet). I have a 2003.5 Mystic Blue BMW M3. And yea I am looking into purchasing a 997tt or an 997s, depending on how the numbers work out.

Ps, is that your TT in the sig, is it blue or black, I'll look out for it too.

 

Im on route 7 behind the old happy harrys (hh just moved down the road a bit). Yes - good hope is good and the roads off it too - so check it out. Also if you follow the 896 and 841 - both are good roads once you get out of avongrove.

Yes - thats mine in the avatar. Its basalt black. 08.

 

on the purchase, you would get the interest deduction on the loan.