My company has given me a $600/month car allowance. Would it be better to lease a new car for close to that amount or buy a car a couple of years old for around $400 per month. I do drive a lot of miles-20K+ and am somewhat hard on my cars. Thanks.
2007-06-01 09:39:01 · 6 answers · asked by Anonymous in Cars & Transportation ➔ Buying & Selling
The company would not be handling the lease. I would have to personally lease the car as have insurance in my name.
2007-06-01 11:22:43 · update #1
What happens if you quit or get fired a year from now. You'll be stuck with a lease. Besides, with the high miles, you'll pay a lot more than normal on a lease.
Any chance your company will lease the car for you where they are responsible for the lease? And then just give you the difference for gas and maintenance?
2007-06-01 10:03:58 · answer #1 · answered by Uncle Pennybags 7 · 0⤊ 0⤋
If the company is paying for it and is taking responsibility for the lease, the leasing is the best option.
If you are given a fix allowance of $600 (you pay extra if you go over or get to keep the difference if you don't spend it all) then buying is the best option.
The lease will cost more overall. also if you drive alot, the extra miles will really cost you. Usually a standard lease only allows around 10K-15K per year of use and the additional miles will cost you anywhere from 10 cents to 60 plus cents per mile you go over your allotment. Also, in a lease, you are responsible to return the car in good condition and will be paying for excessive wear and tear when you turn the car in if you are hard on it.
2007-06-01 10:46:44 · answer #2 · answered by carguy 2 · 0⤊ 0⤋
Buy a slightly used car. You get the benefit of the early depreciation. Some cars loose 1/3 of their value in the first two years. Leasing is the most expensive way to get into a car. Keep track of your actual expenses, or use the IRS mileage deduction to see if your monthly allowance covers the business use. If not, you can deduct the difference between the allowance and the actual expenses on your income tax.
Based on 20,000 business miles a year, your IRS deduction would be $9,000 minus the $7,200 allowance = $1,800.
The main thing you have to watch out for, when leasing, is the annual mileage allowance. Usually it is 12,000 miles. The leasing company then charges you 15 to 20 cents a mile for extra mileage. 8,000 miles x .20 = $1,600 above the lease payments.
Trying to get out of a lease can be difficult. Go to www.leasetrader.com and see how many people are trying to unload their leases.
2007-06-01 10:28:17 · answer #3 · answered by regerugged 7 · 1⤊ 0⤋
Well if the company is paying for it and you are using it for business purposes then the best option for you would be to lease. This way you get a new car every few years, and the wear and tear of many miles do not take over the car making it nasty.
If you were paying for it yourself I would say buy it because leases are only good for people that want to make car payments the rest of their lives.
2007-06-01 09:48:12 · answer #4 · answered by Anonymous · 0⤊ 0⤋
I'd say lease it, seeing as the company is paying for it, that way you will have a new car every few years
2007-06-01 09:47:59 · answer #5 · answered by Anonymous · 0⤊ 0⤋
My suggestion is to buy an older car. If you spend less of the companies money they are more likely to give you better raises and stuff in the future. I would find a car that isn't to old so that it has low miles but that isnt to expensive.
2007-06-01 09:54:34 · answer #6 · answered by Drakien 2 · 0⤊ 0⤋