Leasing vs. Financing
Leasing offers a lower monthly payment because when you lease you are only paying for the portion of the vehicle that you are using during the term of your lease, not the whole vehicle. Leasing offers greater flexibility. You pick your lease term ranging from 12 to 60 months. Traditionally, people choose terms of 36 or 48 months but you are not limited. Would 27 or 42 months suit your particular needs? And when your lease is over, it is easy to replace your vehicle with a brand new one. Some people consider their lease to be a long term test drive where they decide at the end if this is a vehicle to replace, keep a little while longer, or to own outright.
Leasing vs. Buying
Do you enjoy shopping for a new car? Will you have to do a lot of research and visit a lot of dealerships to find the vehicle and the deal that is right for you? Would you prefer to deal with one experienced, impartial person from the comfort of your home or office? Experience the convenience of leasing from a company that is not affiliated with any particular brand or type of vehicle. Halton Autolease knows them all. We are constantly in touch with the market, staying current with all manufacturers' offerings. We are large enough to access the best pricing and fleet incentives. You can enjoy the convenience of one stop shopping while we shop the market and secure the best prices for you.
When a vehicle is for business purposes, leasing is often preferred when preservation of capital is important because it doesn't tie-up lines of credit and other financing resources that may be needed for other aspects of operations.
Tax Considerations
When an automobile is used for business purposes, from an income tax perspective it is most beneficial if the vehicle is used 50% or more for business and has a cost not exceeding $30,000. When you lease, the deduction in respect of lease payments is restricted to parallel a similar dollar limit if the car were purchased. The limit on deductible leasing costs is $800.00 per month plus applicable federal and provincial sales taxes for leases entered into after 2000. A separate restriction prorates deductible lease costs where the value of the vehicle exceeds the aforementioned capital cost ceiling. If you are making personal use of a vehicle acquired for business purposes the taxable benefit relating to this personal portion is $.22 per kilometer. The government reviews rates and limits annually, and announces any changes prior to the end of the calendar year.
It is not uncommon to make an up-front, lump-sum payment under the lease to lower the monthly payments, end of term buy-out, or both. Revenue Canada will normally consider such payment to be part of the normal lease charge in the year paid and therefore may be subject to a limited expense write-off. |
