this post was submitted on 29 Oct 2023
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I hope you're talking about a second vehicle and not replacing your car every 2 years. I replace my phone less frequently than that.
Someone’s gotta make all those 2-3 year old certified pre owned vehicles.
Plus nobody wants to be caught dead driving a 3 year old BMW. It's already on its last leg by that point.
Lol, around here badge shoppers driving 5+ year old cars are like half the BMW driving population.
Likely a lease in that case. Common practice for people that like always driving the newest cars. It's a bit more expensive than buying, and you don't end up owning a car. But significantly cheaper than renting. So you do have to be in a position where it's worth the cost to you.
Well, you claim all the fuel and service costs as business expense when leased, so if you drive a lot it can be significantly cheaper
I'm not a tax expert but that sounds wrong. If you arent using it for business you don't get to claim business expenses on it. I don't see how owning or leasing makes a difference.
Feel free to correct me.
Yeah, you can only claim fuel and service costs if it's used for business purposes. You can do the same with a privately owned vehicle though if you also use it for business, you just need to claim based on % usage.
Does driving to and from work qualify as business purpose?
Generally no unless your employer is paying you for travel. At least in the US, commuting to work is not paid time, so it's not a business expense.
Leasing the car comes from pre-tax salary, as does all servicing and fuel. It's the same as salary packaging a phone or laptop, only the majority of use should be business - not all. Obviously this doesn't apply to every country but it is the case here
I think you’re missing the point: not everyone leases their cars for work. I have a couple buddies that lease because they like having new cars every year or two and it’s easier than buying and selling every time. They’re 100% personal use vehicles.
For example, I have a friend who's job is to have meetings with other people.
Most days, she drives to the office, then gets out of her personal car and gets in the company car, then drives the company car to the meeting, then to the next meeting, and the next one, then back home. She racks up a lot of car expenses, probably drives between 4 hours a day, five days a week. The car is leased by the company, all of the servicing is paid for by the company, all of the fuel goes on the company credit card. It's absolutely a business expense.
Her company doesn't allow it, but if they did she could totally park the car at home overnight instead of at the office. And then she probably wouldn't even need to own a car. Just don't drive it on the weekend or you could be done for tax evasion (that's probably why they make all employees park the company cars at the office - people would use them for personal trips).
Technically, owning vs leasing doesn't make much difference. But it is a hell of a lot easier (and therefore cheaper - because you need to pay someone to figure this stuff out) to pay a monthly bill vs a huge expense one year, then minimal expenses each month, then revenue when you sell the secondhand car.
Why? I love being able to buy a 2 year old BMW for the same price as an equivalent Renault