Loan or Lease?

Automobile collectors and enthusiasts often struggle on whether they should lease or purchase their next high-end acquisition. No doubt, there many options to choose from and each have their advantages; it just completely depends on an individual’s situation.

There are several companies that specialize in vintage and exotic automobile leasing that provide great tax advantages and flexibility vs. financing. These companies leasing services are very unique from what we think of as “traditional” leasing programs, which are based on a rental concept. This type of lease may be more advantageous compared to a traditional lease because vintage, exotic and rare automobiles tend to hold their value more, and depreciate less than common vehicles.

Benefits of open-end leases:

• Afford “more” car by leasing a portion of the total cost of vehicle resulting in lower monthly payments.
• Flexibility to change cars as often as you’d like while deferring the initial sales tax due that you would normally pay when financing.
• Lower monthly payments which result in lower monthly sales tax.
• If your car is used for business purposes, a portion of the lease may be tax deductable.
• No early termination charges.

Financing your vehicle has clear benefits as well. Unlike lease payments that are made up of a depreciation charge and finance charge, a loan is made up of a principal charge and a finance charge. The principal pays off the full vehicle purchase price, while the finance charge is loan interest.

Benefits of financing:

• Remainder of each loan principal payment goes toward equity.
• Possibly build up trade-in or resale value by paying down the equity.
• Greater ability to modify or customize your car’s appearance.
• No over-mileage penalties.

AutoBandit’s is completely neutral in your decision to buy or lease and is not compensated either way you choose to go. Use the check list below to further assist in your decision!

• You like driving different cars frequently – LEASE
• You drive your car for at least 7 to 10 years – OWN
• You keep your car original – LEASE
• You like to modify or customize your ride – OWN
• You want to drive a more expensive car and have lower monthly payments – LEASE
• Driving an expensive car isn’t important to you – OWN
• Your personal or business situation allows for automobile tax deductions – LEASE
• You can’t receive tax deductions on your vehicle – OWN
• A warranty is very important to you – LEASE
• An extended warranty is not important to you - OWN