Recession car deals

[bigboom]

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Are you sure there is a big benefit to leasing over financing? The CRA has basically made it so that no matter what car you get, or how you finance it, your tax benefit is the same. Also, I'm not personally a fan of putting vehicles into the corporation, either as a lease or finance. Much cleaner (and the CRA loves it) if you just charge yourself mileage at the prescribed rate.

It's not a big benefit but there is a benefit to it depending on your use case and mileage. First off just some background, when I lease i do it under my personal and then attribute my mileage utilized for the company as a proportionate part of the lease payment. What this allows me to do is match the depreciation of the vehicle closer to the actual market depreciation and write off part of that. If I was to purchase the car all i can do to write off a cost is the mileage cost.

I drive about 10,000km for work a year, according to the CRA my depreciation only allows me to write off about $5k for the year, I would strongly argue that my depreciation on that car is a lot higher than $5K depending on the vehicle. By leasing the depreciation is built into the payment and thus matches the true depreciation of the vehicle but this also depends on the value of the vehicle you purchase.

[Xtrema]

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Thanks for the explanation.

We're only leasing because the rate is so low. We'd rather not have to cash out any of our investments to buy a car, so we'd rather finance or lease. At the end of the lease we'd have enough money to buy the car outright or give it back to the dealer depending on all the different factors.

Well let's put it this way.

Even if you lock that $20K in a TFSA at 2%, it would yield $1200 by end of the 36 mth lease. Or $800 if need to be taxed.

And there is 0 incentive to give Lexus that $20K. Either way, you are getting a 0% loan. The only difference is monthly payment is lower since you basically pre-paid the 2/3 of the $30K depreciation.

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I drive about 10,000km for work a year, according to the CRA my depreciation only allows me to write off about $5k for the year, I would strongly argue that my depreciation on that car is a lot higher than $5K depending on the vehicle. By leasing the depreciation is built into the payment and thus matches the true depreciation of the vehicle but this also depends on the value of the vehicle you purchase.

If you do mileage write off, you basically get $2900+$2600 = $5500.

My old accountant told that claiming mileage is way easier to defend. How the vehicle is purchased won't matter as much.

The only way to write off a lease is you can totally defend, without a doubt, that car isn't used as personal vehicle.

[shakalaka]

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I think you have to track your personal use one way or the other.

Also - the lease write-off is dependent on the value of the car (IIRC). I'm definitely not an expert on these things.

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Especially if you want to convince the CRA that your Aston is a legitimate business expense and not a toy for personal use, CRA loves people who try to claim things like that.

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i too have a prof corp and i have been advised very clearly by my accountants at MNP in addition to my FIL who is a retired CRA auditor, to not even think about putting a car in the business, and i even work at several different sites. as others have said before, holding it personally and claiming mileage in some fashion is the best way. it just opens you up to more scrutiny, which should be the one thing we are all trying to avoid on the tax front. think about it, if i was a CRA lifer driving a honda accord and a file came across my desk showing a dentist driving a fancy AM for "business purposes", i'd get ready to tee off.

Gotta re-visit the accountant I guess.

[pheoxs]

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Fuck. You guys are making me double think this all and perhaps I should be meeting with an accountant again.

None of my vehicles, other than the Aston are under my corporation. I do drive it to work and court etc so yea technically I do use it for work. My understanding was basic in the sense that, I have a vehicle that I am leasing and paying X amount for monthly. Being that it is a lease, I can write-off a certain amount of payment every month as I do use it for work (driving to the office, to and back from courts, client meetings etc). But perhaps I need to look into this more closely and try to figure out a better way.

Yeah you do have to bare careful about using a exotic car as a work vehicle. I was basically told if I wanted something baller then to buy it personally and expense mileage to the company whereas if it was something more typical (run of the mill SUV but can still be higher trim) then it's more justifiable to be a work vehicle.

[kJUMP]

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Fuck. You guys are making me double think this all and perhaps I should be meeting with an accountant again.

None of my vehicles, other than the Aston are under my corporation. I do drive it to work and court etc so yea technically I do use it for work. My understanding was basic in the sense that, I have a vehicle that I am leasing and paying X amount for monthly. Being that it is a lease, I can write-off a certain amount of payment every month as I do use it for work (driving to the office, to and back from courts, client meetings etc). But perhaps I need to look into this more closely and try to figure out a better way.

yup, take time and explore your options, anything to avoid a potential massive headache in the future. also consider another accountant, that is some egregious advice in my opinion, though to be fair, i don't have all the info.

sorry, thought you were a dentist, not a lawyer. can't keep all the Beyond careers straight

[bigboom]

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If you do mileage write off, you basically get $2900+$2600 = $5500.

My old accountant told that claiming mileage is way easier to defend. How the vehicle is purchased won't matter as much.

The only way to write off a lease is you can totally defend, without a doubt, that car isn't used as personal vehicle.

There's no difference in defense with the mileage on a lease vs. purchased vehicle, the end of the day you need a mileage log in either situation to defend the mileage driven if you get audited.

[dimi]

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Fuck. You guys are making me double think this all and perhaps I should be meeting with an accountant again.

None of my vehicles, other than the Aston are under my corporation. I do drive it to work and court etc so yea technically I do use it for work. My understanding was basic in the sense that, I have a vehicle that I am leasing and paying X amount for monthly. Being that it is a lease, I can write-off a certain amount of payment every month as I do use it for work (driving to the office, to and back from courts, client meetings etc). But perhaps I need to look into this more closely and try to figure out a better way.

Unless you can somehow justify 100% business usage (the nature of the vehicle itself negates that and the CRA is very aggressive with luxury vehicles) you are in for some horrible tax consequences if someone was to review your automobile expenses. Talk to your accountant, or better yet get a new one.

[killramos]

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Fuck. You guys are making me double think this all and perhaps I should be meeting with an accountant again.

None of my vehicles, other than the Aston are under my corporation. I do drive it to work and court etc so yea technically I do use it for work. My understanding was basic in the sense that, I have a vehicle that I am leasing and paying X amount for monthly. Being that it is a lease, I can write-off a certain amount of payment every month as I do use it for work (driving to the office, to and back from courts, client meetings etc). But perhaps I need to look into this more closely and try to figure out a better way.

As an extremely general statement driving to work does not constitute business use.

I’m not saying you will get audited or that you will get in trouble. Just that you are really opening yourself up a lot of exposure by pushing it with vehicles inside the Corp. Exposure that can be completely eliminated by just keeping the exotics personal.

I feel like end of the day this is bordering more on tax lawyer than accountant debate, which I am sure you can appreciate.

[Mitsu3000gt]

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Are these recession deals still a thing?

We're looking at the 2019 Lexus NX300H - I see on the website that there is a 5k incentive right now. What is the chance of getting the price down even further?

Lease rates are at 0.9% on a 40 month lease. We plan to keep the vehicle; is leasing worth it if we are keeping the vehicle?

Get them to show you a CCC report with their cost for the vehicle, then offer them whatever profit you deem fair ($500 or $1000 or whatever). The incentives don't come from the dealership, so it doesn't affect your negotiating power, but the dealerships might try take credit for it in order to avoid further discount.

[Prelude_dude]

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Get them to show you a CCC report with their cost for the vehicle, then offer them whatever profit you deem fair ($500 or $1000 or whatever). The incentives don't come from the dealership, so it doesn't affect your negotiating power, but the dealerships might try take credit for it in order to avoid further discount.

Is everyone just willing to show a CCC report?

[killramos]

CCC report is free now, you just have to provide your contact info in exchange. And they will call you. Many times. And very quickly after signing up.

CMP called me within 4 minutes when I ordered a CCC report for my truck.

Still worth it.

[ercchry]

Money down on a lease makes sense if you have to lower the payment to keep them under 5% of gross income... why? So you don’t cut into qualifying for a mortgage/renewal... way more important with a lease too, cause you can’t just refinance or shift the payment to someone else with a lease as easily as with financing. Unless you’re timing things with mortgage renewals I would pay attention to that for sure especially with the benchmark qualifying rate vs how it was pre-2016

[Buster]

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Money down on a lease makes sense if you have to lower the payment to keep them under 5% of gross income... why? So you don’t cut into qualifying for a mortgage/renewal... way more important with a lease too, cause you can’t just refinance or shift the payment to someone else with a lease as easily as with financing. Unless you’re timing things with mortgage renewals I would pay attention to that for sure especially with the benchmark qualifying rate vs how it was pre-2016

Really interesting...I like learning new stuff.

Can you elaborate on the 5% thing?

[ercchry]

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Really interesting...I like learning new stuff.

Can you elaborate on the 5% thing?

Ratios... 39/44... gds/tds... so 39% of gross for home related expenses (mtg, taxes, heat, hoa/condo fees etc) and 44% for all obligations (3% of balances on revolving lines, and full payments on instalment loans, also rental home expenses... little different though as you can offset with a percentage of the income)

[R-Audi]

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As an extremely general statement driving to work does not constitute business use.


I feel like end of the day this is bordering more on tax lawyer than accountant debate, which I am sure you can appreciate.

Depending on your work situation, (contractor etc) what my Accountant suggested was to register a business to your home address, and then any commute from home to the other business would be justified as business travel write off. (As long as they are related) Not sure if as a Lawyer you can have your company be paid rather than personal etc.

[lasimmon]

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Depending on your work situation, (contractor etc) what my Accountant suggested was to register a business to your home address, and then any commute from home to the other business would be justified as business travel write off. (As long as they are related) Not sure if as a Lawyer you can have your company be paid rather than personal etc.

This isn't true AFAIK. Only travel to a non-normal place of business would be business use. So if you are for example on call as a 24 hour plumber and you drove from home to someones house for an emergency that would be business use. But home to your shop would not be. Even if you are a contractor commuting to the office it is personal use as its your normal place of business.

[killramos]

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This isn't true AFAIK.

+1

A big thing here is there is lots of stuff you can do, or people claim to do, that they get away with. That does not mean it’s above board. CRA has been getting far more aggressive these days and I would consider it to be pretty big exposure.

[Buster]

I would say the probability of CRA getting aggressive with you is way, way lower if they just see a mileage charge to your corp.

[pheoxs]

Yup as others have said. Commuting from your home office to your work office on a regular schedule is not something you can write-off. If you are going to a clients office (and which clients office changes periodically) then you can. But if you are contracting to XYZ company you can't count mileage from home to XYZ.

[mzdspd]

I had an ad pop up on facebook from don wheaton for a LEASE deal which I would consider recession deal, Nothing is on their website but i took a screen shot of the trail boss deal.

2020 Trail Boss Silverado (custom) for 49 per week for 24 months and 2750 DP.. So works out to 326 per month..

They also had 2020 Denali Duramax HD for like 700ish for same 24 months.. This must be for exporting to the US..