In today’s world, there are many factors to consider when it comes to purchasing or leasing a vehicle for your business. In our video, we will discuss some of the key factors to consider when making this decision, including the cost of the vehicle, the length of time you plan on using it, and whether or not it will be used for personal use.
For those who prefer to read, a summary is available below the video.
The importance of considering the financing model
When it comes to purchasing or leasing a vehicle for your business, one important factor to consider is the financing model.
If you plan on using the vehicle for a long period of time, it may make more sense to finance it rather than lease it. This is because in the long run, your deduction will become pretty similar whether you finance or lease.
Additionally, if you can get a good rate of interest on your financing, it may make even more sense to go this route. On the other hand, if you only need the vehicle for a short period of time, leasing may be a more cost-effective option.
It’s important to carefully weigh the pros and cons of both options in order to make the best decision for your business.
Personal use vehicles vs. business-only vehicles
Another factor to consider is the type of vehicle you are purchasing. If it is a personal use vehicle, it may make more sense to buy it personally and keep it separate from your business. This is because when you use a vehicle for personal use, you may need to take a taxable benefit for the personal use portion of the vehicle. In this case, it may be better to keep the vehicle separate from your business.
Additionally, you may be able to take a mileage allowance back as a deduction for the company, depending on how much you use the vehicle for business purposes.
On the other hand, if the vehicle is purely for business use, you may want to consider purchasing or financing it through your business. This way, you can write off the full value of the vehicle on your business taxes.
Seeking professional advice on the best decision for your business
Ultimately, the best decision for you will depend on your individual circumstances and needs.
If you have any further questions, feel free to reach out to our office in NE Calgary. We are always here to help and go into more in-depth conversations about the best way to handle purchasing or leasing a vehicle for your business.
Book a Free consultation today or contact us at 403-457-4232 or by email at info@rmiassociates.com.
