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Thread: Leasing vs. buying

  1. #1
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    Leasing vs. buying

    I'm looking for your experience/knowledge on leasing vs buying a new vehicle for business use.

    Last year I started a business, and business is good. I need a forestry road capable vehicle and something that looks shiny and successful. I am thinking of getting a new truck (likely 2016 Taco) and leaning towards leasing. As a lease it is not a capital expense and I can write off all lease payment amounts on my income tax and i would have it under warranty at all times. As a purchase I can claim the GST amount, and I pay for something that becomes mine.

    Your thoughts/experiences?
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  2. #2
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    For work leasing makes a lot of sense. But if you are on forestry roads a lot two potential problems will come up. First, any damage that WILL occur needs to be fixed at your cost before the lease expires unless you have a lease company managing it for you. Second, I would advise against an import truck for real work. They are frail and parts are further away. Domestics have a better parts network and they are designed for harder work. Tacomas, Tundras, Dodges, are not for work. They are just pretty.


    Or you could have said "sorry, my kidnap victims keep kicking my elbow, it made me drop my crack pipe and swerve"

    -bangnscrape

  3. #3
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    Domestics have a better parts network and they are designed for harder work. Tacomas, Tundras, Dodges, are not for work. They are just pretty.
    Whoah, the parts network part may be true but i have to very strongly disagree with the rest of that statement. Except for the part about Dodges being weak, that is true, they are garbage.

    I have been in the woods for 7 years and seen all makes out there except for Nissan. On Nootka Island we had 1 F350, 1 2001 2500hd duramax, and 1 2011 1500 chev pickup, and 1 5.7 tundra. All stock 4x4s. We also used Tacomas to take the 62km of variable gravel road that takes us to Tahsis before getting to Nootka. The Duramax truck had 0 ground clearance and was pretty well useless but it rode nice and had good power. The trans cooler in the front ended up getting munched because it is so close to the ground. The gas 1500 4x4 overheated and subsequently grenaded it's transmission. Also the door handles fell off, windows stopped working, all kinds of crap quality issues. The Ford was fine but had weak power... not a big deal on bush roads. I have to admit that ford products above the F150 are built pretty strong and have good ground clearance. The best truck by far was the Tundra. Best approach and departure angles, consistent operation, nice ride, good ground clearance, and never a hiccup. A guy where i work now has an ex camp truck that he bought from the company which is a 1997 Tacoma 3.4l 5-speed 700,000km on it! On forestry roads these trucks never get used for towing or hauling significant loads. Most failures are of shocks, ball joints, u-joints, wheel bearings, steering components, any and all bushings, and anything that is too low and gets snagged. Oddly, all F150s I have seen in the woods (90s jellybean ones) have eventually had rear leaf spring fatigue failures. Weird.

    /defensive rant

    Very true about the damage part. Could come back to bite me. I'd like to hear about your bad experiences with imports on rough terrain. Too be honest if i get a company truck it will be mostly highway and I use my clients trucks in the bush most of the time.
    Last edited by clay72; 02-16-2016 at 12:02 PM.
    1JZ 1984 Celica GTS
    1UZ 1981 Corolla sedan
    ? 1972 Celica race car

  4. #4
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    From what I've heard people say from working around the world in harsh conditions is that Toyota trucks are the only ones that don't fall apart from driving on rough roads.

  5. #5
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    When you're a small armed militant group and you want to transport your members and some small arms to a combat zone you choose a Toyota truck to get you there.

    I don't think they lease them though.

  6. #6
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    Quote Originally Posted by clay72 View Post
    Whoah, the parts network part may be true but i have to very strongly disagree with the rest of that statement. Except for the part about Dodges being weak, that is true, they are garbage.

    I have been in the woods for 7 years and seen all makes out there except for Nissan. On Nootka Island we had 1 F350, 1 2001 2500hd duramax, and 1 2011 1500 chev pickup, and 1 5.7 tundra. All stock 4x4s. We also used Tacomas to take the 62km of variable gravel road that takes us to Tahsis before getting to Nootka. The Duramax truck had 0 ground clearance and was pretty well useless but it rode nice and had good power. The trans cooler in the front ended up getting munched because it is so close to the ground. The gas 1500 4x4 overheated and subsequently grenaded it's transmission. Also the door handles fell off, windows stopped working, all kinds of crap quality issues. The Ford was fine but had weak power... not a big deal on bush roads. I have to admit that ford products above the F150 are built pretty strong and have good ground clearance. The best truck by far was the Tundra. Best approach and departure angles, consistent operation, nice ride, good ground clearance, and never a hiccup. A guy where i work now has an ex camp truck that he bought from the company which is a 1997 Tacoma 3.4l 5-speed 700,000km on it! On forestry roads these trucks never get used for towing or hauling significant loads. Most failures are of shocks, ball joints, u-joints, wheel bearings, steering components, any and all bushings, and anything that is too low and gets snagged. Oddly, all F150s I have seen in the woods (90s jellybean ones) have eventually had rear leaf spring fatigue failures. Weird.

    /defensive rant

    Very true about the damage part. Could come back to bite me. I'd like to hear about your bad experiences with imports on rough terrain. Too be honest if i get a company truck it will be mostly highway and I use my clients trucks in the bush most of the time.
    My basis for stating what I did about imported trucks is based upon my experience repairing trucks in the Wood Buffalo municipality. Vehicles there see the most severe service known to the automotive industry. Similar to mining except the mud and sand there from the oil sands is whole different animal. None of the oil companies use imported trucks because they get destroyed too easily, cost too much to repair, and their parts are not readilly available. Anything over 24 hrs wait is too long.

    I love Japanese cars but they are not truck makers. They make the trucks guys use in town.


    Or you could have said "sorry, my kidnap victims keep kicking my elbow, it made me drop my crack pipe and swerve"

    -bangnscrape

  7. #7
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    While I would agree that a truck such as a Tacoma has no place in an actual mining scenario, etc., I wouldn't extend that to say that the Japanese are not truck makers, especially when it comes to Toyota. They know how to build a truck that can take the abuses of hard work. They just don't like to sell them in North America, so we get the lighter duty trucks instead (though the Tundra is a bit better).

    Still, someone looking for a truck to be shiny and successful and okay to drive on logging roads is not looking for a truck. They're looking for a truck.

    Something like a Tacoma fits the bill in a case like that, I think.

    Jeff

    2011 GSE20 Lexus IS350 6MT F-Sport with LSD
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  8. #8
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    Yes, we like Toyota, that much is clear so far. Who would have thought?

    Here is your answer,

    If you're a giant company, you lease, because the money you save on a lease, even if it's just small versus monthly payments, can save you a ton per month on your whole fleet. You can then use that extra cash saved for reinvestment in the company or investment (month to month). That money saved will make more than it's worth. It's basically debt leverage. But you need a lot of money to make it worth while. Leasing was probably invented for this reason.

    If you're a small company, or solo, or just some dude, buy. You get more use out of the vehicle, and you're left with something to sell and recoup cash at the end. It works out better in the end.
    (people who lease vehicles for themselves are living paycheck to paycheck and need to drive a car they can't afford)

    Buying for straight cash is the most retard thing you can do, unless interest rates go way way up, way up. You're just throwing away a huge chunk of change you could be putting into your business instead.
    20k at 5% interest is $1000 a month. Your truck payment is $500. So, you make $500 on that money per month and get a free truck. To give up 20k for a depreciating asset, not smart...It's a no brainier.
    But...you have to have enough risk tolerance to invest $20 in the stock market. Most people don't. Smart business owners do.

    Look into lease takeovers too. You can sometimes pick them up for pretty low monthly rates if the original buyer put down a big down payment and/or negotiated terms. After write offs it can be a really decent option.


    I don't have experience with lease write offs though, talk to your accountant to find out what it's really worth. Could make all of the above wrong lol.


    RETIRED

  9. #9
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    Cash isn't bad if you can get a great deal. If you can get the car for let's say 60% of the MSRP I 'd say go for it.
    1989 MX83 - Sold
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  10. #10
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    As someone who is seeing the difference first hand, lease has some pretty big advantages.

    First off, the price of the car never changes. Lease or finance, the car price is the same. The monthly difference from a 60 month lease to a 60 month finance could be saved and used to pay out the difference almost perfectly. The dealership will not treat you different if it's lease, cash or finance (they actually prefer lease), so the cash myth isn't really true, except for the incentives from Toyota themselves, which is $0 for Tacoma and $2000 for a Tundra at the moment.

    If you lease with Toyota, you get gap insurance, so you could write off the car, and Toyota covers the difference from what you get from insurance to what the car is worth. This also works if the car isn't written off, your lease end value is guaranteed and as long as it's been fixed, you get to trade it in not at a lose.

    Two months before the lease is done, if it's in awesome shape, take it back and get it appraised, you may make some money towards another car, if not, hold onto it until the end and get the end value.

    Get a wear pass and get let off for $4000 worth of damage at the end of the lease.

    You can always up the km allowance to suit your needs. We had one guy raise his to something crazy and made his buy out $800. He leased it through his company and then paid out the rest and kept the can for his wife. This was the third time he did it.

    If you lease and love the truck and want to keep it, you can buy it out, but most people with a business lease again. Having warranty is also nice.

    Once you have leased once, there are a few benefits you get from Toyota to do it again, they don't do that with finance.

    The benifits to finance is your name is on the ownership, but if you don't make the payments, the bank takes the car in either case.

    I'm a little far to actually sell you the truck, but when you pick the model and everything, PM me and I can give you some insider info.
    Last edited by Blade7; 02-17-2016 at 06:32 PM.

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