I'm young and stupid still, I'm getting there, eventually.

 

Any particular reason Jay?

 

Jay is saying finance because that will put you in an equity position in 3 years. But if you are planning to sell the car anyway, why make the extra payment if you can be in the exact same situation via lease and have the opportunity to dispose of the vehicle easier?

You can write off a portion of your lease payment if you have your own business. The vehicle will belong to the business, not you. You just drive it. I say a portion because you aren't going to be using the vehicle soley for business all the time, part of it will be personal use. Yes, talk to an accountant.

Woodson: Koala will be putting $6k down. He is debating if he wants to put the extra $9k via finance so he can get the same payment amount as the lease. I was just saying if he invested the $9k in any Cdn Dividend Mutual fund or any stock, he'll see at least 10% returns per year. Compounded it'll work out to about $12k at maturity. He'll have to pay taxes on what he made, which is estimated to be $3k at whatever % of his tax bracket. The $600 was just an estimate on the taxes he has to pay assuming the $3000 earned was capital gains so 50% of $3k gets taxed at your tax bracket.

That's putting the extra money to good use.

 

i finance because yes u are in a equity range in 3 years.... so u can sell it...
plus just the fact that when leasing.. its not your car..
plus financing u can pay it off faster....

leasing takes to long if u decide to keep
i did a balloon payment (which is close to a lease) on the rsx and it was extremly hard to unload...
financing made selling a car alot easier...
do u think this rdx is something u will keep for a long time



fyi... im no expert on this stuff... just going by personal experience

 

Yah but he has a business, that's crucial. Mattress Mattress?

Vehicle=Expense

I don't know the exact ratio but for my restaurant, our 4runner is our company car. We expense a significant portion of the monthly payment, in addition, most, if not all repairs and maintenance related to that said vehicle can be that deducted from the company's expenses.

Jay, balloon payments are different. For normal leases, at the end of the term, you just give it back.

In terms of finance, it's easier to sell your car because you've already paid so much of it off. Leasing is effectively, just renting.

I doubt Koala will keep a car for longer than 3 years. Cars keep getting better and you just keep on switching.

 

OK, now I understand what you meant. It was 3:00AM when I read your earlier post.

 

And you're declaring a taxable benefit on your T4, right?

 

Actually I'm nearing the end of my employment with mattress mattress... working on getting fired by spring time (long story).

 

...true for the past few years but no guarantee that will happen in the next few. I'd kill to to be sure of getting those kinds of returns going forward. In fact, you could lose that amount of money over the next 3 yrs if the markets go south on you...but at least you'd have a capital loss!

 

Woodson: The way I'm reading your post, I presume my accountant is doing the above because it sounds like we might be in trouble if we aren't haha Honestly, that's about as much as I know hehe

doodlebug: Absolutely. Yes I know in the world of investing, past performance does not guarantee future performance. It was illustrated purely as an example!

I do feel confident however in the right mutual funds. My Trimark Select Growth and RBC Dividend have done really well the past year and have solid growth patterns over the past 10+!