Originally posted by Crestliner
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First, when leasing was created it was the start of the biggest scam of the century. Interest rates were in excess of 20% and combined with the sales pitch of "the payments are 100% deductible" too many people fell into the trap of buying something they didn't need or possibly buying something that was new or significantly higher in value than they actually needed.
Today, lease rates are a bit more competitive but still quite a bit higher than a loan with good security (land). The last time I bought bins the company pushed hard for me to lease it and could not understand why I wouldn't.
"The bin payments are a 100% deductible" says the seller - so is the purchase, is my response with the only difference of when I can deduct it, which will be slower. I am a corporation so I don't need to create tax deductions faster than they naturally do with capital cost deductions.
If it was a larger purchase in dollars, personally I would look at a 10-15 year mortgage which would make affordability and semi annual payments way less than the standard 3-5 lease which is hard on my bank acct. The key thing is a 5 year lease at 6% will often work out the same total cost on a 8-10 purchase at 3.9%. Yeah I know the next comment will be you need 25% down and then my response would be if you don't have 25% then you best not be buying anything!
When I drive around and see these large bin sites and beautiful shops I often wonder how many are leased and how well its working on the cash flow. Then I hear guys talk about 2 year leases on various things and wonder how long until the government comes back on this.
Expecting a blast in return from some of you now, its just my 2 cents.
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