bigc

Sorry M5KILLR didn't see your earlier post. I'm stupid.

MB Fanatic

Paid for in cash.

jangy

I did a single pay lease. Gave em $60K down and will have to pay 35k at the end of 3 years. There are actually TWO advantages to leasing. The first are the tax advantages that we are using (which is wierd as we should be able to write off owned cars in some depreciated manner as well). But, the other advantage is that you actually only buy a portion of the car now, while you are establishing the future price (real value of money). Not to sound snooty (cause I work for my money), but $35K for a 3 year old E55 that I love anyway is going to be one SMOKING deal for me when it comes. You don't even pay the taxes on that portion until you get it, so that is deferred as well

OzE55

In Australia, anything that is used to earn income can be used as a tax deduction. Obviously there are about 1000 pages of tax law ifs and buts.
Remember, anything NOT used to derive income in not deductible - eg home mortgage ( I understand you can do that in the USA).

oldgixxer

Paid in full,bank check...Not too safe to drive or walk around these parts with $90k in cash

grizbo

Bought mine using the home equity loan so I can deduct the interest. If rates go up too high too fast, I'll just pay down the loan with cash from elsewhere. Home is paid off so I just took out the equiloan for toys.

mainroman

Paid in full cash.
Don't belive in leasing or financing.
But what you can afford and then sell it for same money year later.
)))

ndabunka

Ah, you might want to edit this post as you are clearly stating that you are NOT using the Equity line for home improvements. As such, the interest is in fact NOT DEDUCTIBLE. Taxes 101. Good thing I don't work for the IRS, right? It simply AMAZES me that no matter how much cash someone has, they still don't understand when they are in violation of basic tax laws.

ndabunka

Hmm, interesting idea if it weren't for the risk of an accident in those leased years. How did you address getting your equity back out in the event of an accident? Aren't leases different than typical puchased vehicles (regarding ownership and all)?

jangy

What is different? Either way, I have full insurance. What does an accident have to do with anything? I also have an extended warranty, is that going to change things?

Lease or "purchase", either way you do NOT hold the title. Get real.

ndabunka

Actually, it DOES matter. If you total a car, the insurance covers it (to a point). There are numerous threads relating to people who have had both small and large accidents. The way you are re-imbursed (or not) is dependant on way the insurance company accounts for the value of the vehicle. You can see in other post that people have put down $5K on a lease. Totalled it 6 months into the lease. The insurance company pays off a portion and the leasee is out that $5K down payment. I've also seen it the other way where the leasee puts nothing down, does not take out gap coverage and then owes ADDITIONAL money when the insurance company totals the vehicle.

As far as who's name is on the title. If you purchase, it's in your name and the finance company is listed as having loan interest. If it's a lease, the leasing company's name is on the title (right?) and you simply pay them a "fee" for managing the lease. Although you have an "interest" in the car, you don't actually own it, they do. To you it is an "expense", not an asset. That's the reason you can deduct it from your business-related "expenses".

The extended warranty (on a lease) is indeed unusual but has absolutely no bearing on the financial aspects of the leasing/purchase arraginment other than you having given Benz an extra chunk of cash for a service you might not even take advantage of. Consider the possiblity that the car does experience significant issues/problems that Mercedes is able to address through TSB's and other issues. IIf you were to "get tired of dealing with a car that has a lot of problems" at the end of your lease and therefore decide that your not going to exercise the "buyout option" and the end the value of that extended warranty to you is ZERO. However, you could still decide to try to buy out the car at the end as planned and then simply sell it to someone else on the open market in order to get as much of your money back as possible, it still doesn't make a lot of sense to have purchased it "up front" unless you do hang onto the car beyond the lease period.

$60K cash could be pretty easily turned into $75K cash over a three year pedriod through relatively conservative investments (i.e a balance portfolio returning as little as 7%). So, you real cost of thet $35K car at the end of three years would be the $35K payoff plus the additional $15K you lost in "opportunity" cost. When viewed from a purely financial aspect, your actual "out of pocket" costs equates to $50K in three years.

ima55r2

Each person's beliefs about ownership can be very strong but there are advantages to leasing. Your situation is not ideal since you have a greater exposure to loss and less potential for offsetting car costs as ndabunka has posted.

It is possible to write off owned cars...consult with your accountant. You can have a 100 percent deduction but it will take forever to do it as business equipment.

Your smoking deal for a 3-year E55 for $35k has less sizzle than you think. It still cost you $95,000!