Canada

Guess what: the RX-8 is going to be my company car! I got a promotion earlier this year at my work, and got to select a car that will be leased to me (via GE Captial Fleet Services) as a benefit. Rather than choose a black Mercedes, or Passat, or Audi, I ordered a Titanium Gray Mazda RX-8 (AT) around Feb/March. Anybody else choose the RX-8 as a company car?

I feel impatient because the dealer originally told me it would come in June. Towards the end of June he told me it would be coming in July. Yesterday, finally, at least I got him to look up the VIN to learn where it is: "at sea", i.e. on the boat from Japan to Vancouver. Well, that's a start.

The dealer mentioned that not just our Canadian-ordered RX-8's but also other Mazda vehicles and parts that have arrived from Japan have been sitting in Vancouver port for 15 days. He wasn't aware of any reason for the delay. I hope that mine and others coming in subsequent shipments will not suffer the same delay.

I posted this earlier in the lounge but should have gone here in the RX-8 discussion.

Zoom27

Well Done on the gray RX8.
So its going 2 be a company car.
I know how u feel about the Delay of the RX8's.
The RX8 ship has already arrived in Austraila.
Its gonna be another 3 weeks until they actully unload them out of the ship!
Any way i forgot 2 say welcome to the Forum.

Doug

mac

I will also most likely be treating myself with a company RX-8. With a lease rate of 9.1% we might finance it instead at 4.5%. The accountant will tell me which will be better financially. It will be interesting to see how much the accountant will be able to declare as company expenses.

RotaryStalker

If it's for your own company mac it's (IMO) better to buy then lease.

I just bought a Toyota Tundra a few weeks ago which qualifies as a capital expense write off (GVWR > 6k lbs). Gotta love those loopholes. :D

RotaryStalker

mac

I'm hoping, but tax laws up north are a little less generous.

FritzMan

My red GT will also be company insured and owned, then leased.

Chadr

My understanding in the US was it was better to lease the vehicle (if not GVW > 6000) for your own company as it was a near 100% tax right off whereas the purchase had to be depricated over a 5 or 7 year period? Anyone fill me in on that?

Midnight Flyer

Don't know about the US but in Canada you have a choise. The following benefits are for the company assuming you own the company.

Lease or buy, if it is your only vehicle then you have to declare personal milage and take a percentage of the total miles driven. If you have a personal car, then you can assume 100% company car usage on taxes.

On a purchase, you can depreciate 15% the first year and 30% of the residual each following year for as long as you want. Usually after 4 years there is not enough left to make it worth your while so people sell the car and start over. You can also deduct the interest on the loan. The one nice thing is that if you get the car in Dec, you can write off the 15% in the year you purchased the car. You can also write off 100% of the GST in the year you buy the car.

On a lease you can write off the lease value for the months you own the car, and the monthly GST amounts.

When you sell the car, if you sell the car for less then the depreciated amount you can record a loss. If you sell it for more you record a profit. On a lease, the lease buyout amount is checked to make sure that you did not fix it so that you can buy the car for a non-reasonable amount. For example you can't have a 0 residual as this would mean that the full value of the car was paid through the lease and the govt would not like that.

In my case, taking into account interest rates and the fact that I want to own the car when I am done, it was a wash as to which was cheaper. However I got to take the 15% dep off even though I had not paid one cent on the car during the year, and I would take 30% off the next year.

rotorian

Tax laws are definitely different in Canada! Comments form you U.S. guys don't apply here. I've been leasing all my cars (own company and personal) for over 25 years! The only way to go!
(most "car guys" get the itch for something new quicker than the average person) most people look at trading after 3-4 years, because of boredom, repairs etc. Who wants to own something that definitely goes down in value.

The lower payments help too!

Most people don't truly understand leasing, there has been some bad publicity and dealers taking advantage of non disclosure in the past.

RotaryStalker

Generally buying is a bit better especially if you hold a car for four years or more. Canada, puts strict limits on lease deductions so that you don't come out ahead leasing over buying.
Also, you have to factor in the residual with buying that you don't get with leasing. Thus, financially buying is usually a better deal.

This would not be true if you got rid of a car every two years or so and put on less than 15K kilometers a year. Then, you may want to lease. Also, you can always sell a car if you need to. It is very difficult and expensive to get out of a lease before the lease expires. Thus, you have less flexibility

The amount you can depreciate on a vehicle < 6000lb GVWR (on a truck frame) is based on an evaluation by the goverment using the cheapest car that they feel will work for business. I think they recently used a cheap Ford to determine this which had a cost of $13k. So how long it takes to depreciate a vehicle now is a factor of it's cost. They changed the law in 87 specifically to deter people from buying large Mercedes or Jaguars and writing them off in 3 years. I don't have the info in front of me now (I write tax deduction tracking software currently) but a car costing $36k and used mainly (% is what I'm missing) for business I believe takes over 10 years to write off under the current law.

Always itemize your vehicle deductions as well.. You'll come out better then the 36.5 cents per mile which the IRS calculated using the same cheap Ford.

And if you're going to take a loss on a vehicle it is better to sell it yourself to get the deduction.. Don't trade it in unless you're going to see a profit.

I can post the exact calculations if anyone is interested.

Hey mac, sorry I didn't check where you were from before posting my previous message.

RotaryStalker

Quick_lude

I will lease the 8 and write off under my business.

Midnight Flyer

You can only depreciate 28K regardless of the value of the car. So if you buy a 36K car, you only get 15% of 28K the first year and 30% of 23.8K the second year, etc. However you can deduct 100% of interest.

Each of these values is further adjusted by the % of personal vs. business use.