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Old 09-20-2007, 04:42 PM   #33
dtthiaga
6th Gear Member
 
Join Date: Mar 2002
Location: Ontario
Posts: 1,552
Dinan 3, you do realize that you if you own the car, there is a ceiling of $30,000 for automobiles when considering CCA (Capital Cost Allowance). The CCA may be claimed at a rate of 30% per year, and in the first year, it's only 15% depreciated!!!!!

Leasing allows you $800/month to be written-off, even in the first year. You have to crunch the numbers, but to some, leasing is far better than owning it. You might be leaving Tax money on the table!!!!

And, if you can do it right, you can then buy the car out of the business for far less than it's actually worth, Don’t assume people are “inexperienced”.

e30bim You still didn’t tell us where your dad was/is a CFO??? You still don’t get it do you. I’ll break it down in simple terms for you.

Let’s assume you have $10,000 cash for a car. The bank/lease rate is 4%. So, buying the car outright, you saved yourself $400.00 in interest.

Now, if you INVESTED the $10K, at 10% rate of return, you would have made $1000.00. Now, paying the car payment, or lease, you spent $400 in interest. So, I’d be up $200 by leasing and investing. Given the opportunity to write off more with a lease (potentially), you would be up even more.

And, if the car turns out to be a POS, you can walk away from the lease vehicle.

When crunching numbers, you have to consider opportunity cost as well. But, do or think what you want. It’s your money.
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