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Buy or Lease a Business Vehicle: Which Costs Less?

January 15, 2024

“Buy or Lease a Business Vehicle:
Which Costs Less?”

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with all the details…

Trying to decide between leasing and buying your next business vehicle?

Then the first question you’re probably asking yourself is which option costs less.

Sadly, comparing the cost
of leasing and buying isn’t easy.

To make a smart decision, you have to consider more than just out-of-pocket costs.

For example, you need to take into account:

  • Cash available
  • The tax benefits of each option
  • The time value of money

I’ll explain the important distinction.

When you buy, you own the vehicle free and clear after you repay the loan. So you get the trade-in or sale value of the vehicle when you decide to get rid of it.

When you lease, the dealer or leasing company owns the vehicle, and you pay for its use over the lease term. When the lease ends, you can either buy the vehicle for a “residual value” stated in the lease, or walk away and get a new vehicle.

The math gets complicated very fast.

That’s why I’ve included a handy calculator that makes everything clear.

All you do is:

  • Enter the numbers—it’s easy.
    • The calculator crunches the numbers.
    • You see the result—it’s an after-tax result in today’s dollars (the PV or Present Value).

    Take my advice. Don’t struggle with the math.

    Use my calculator instead. It will help you make a tough decision a whole lot easier.

    Thinking of buying your next business vehicle, check out my latest article. LOTS of great, helpful information there, including the calculator!

    CLICK HERE to read my completely new article titled:

    “Buy or Lease a Business Vehicle:
    Which Costs Less?”

    Filed Under: Cars SUVs Pickups, Depreciation, Leases, Section 179, Tax Planning

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