Should I Lease or Buy a New Car?

We believe that if you are a new car buyer, you should lease unless you are a person who likes to keep their car for long period of time and by that I mean for seven plus years. If you like to trade out before seven years, by all means lease. If you keep your vehicle for seven plus years, it is typically more cost effective to finance than to lease. Generally, you should finance a pre-owned vehicle because it is less expensive to lease the same vehicle new. The exception is if the manufacturer offers a certified pre-owned lease program. If that is the case, you should have your sale consultant show you options both ways between new and pre-owned.

What are the tax advantages to leasing versus financing?

As it relates to excise tax in Massachusetts or personal property tax in Rhode Island, there are no tax advantages one way or the other. However, there is an advantage in sales tax. When you finance or buy outright, you have to pay all of that non-tax deductible sale sales tax up front. When you lease, you pay sales tax as you consume the vehicle. So if you put money down you pay sales tax on that and you pay sales tax on the monthly payment. Therefore you are deferring the payment of the tax. In addition, if you have “business use” of your vehicle as defined by the IRS, You should be able to reduce your taxable income by a much higher percentage of your actual out of pocket expense if you lease than if you finance or buy outright.

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For more information on Synthetic Oil please click here

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