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Leasing a new Prius

Discussion in 'Gen 2 Prius Main Forum' started by sicnarf315, May 15, 2006.

  1. sicnarf315

    sicnarf315 New Member

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    I have been looking into buying or leasing a new prius. The lease looks like a much better deal when you consider the tax credit you receive. Also with the emergence of new hybrid technologies in the next few years, car values may deprecate more than expected.

    Is anyone here leasing there Prius and if so under what terms and how much per month. I do a lot of driving in town and I think a Prius would not only be good for the environment, but a good investment. I am looking forward to the 2008 Prius but I currently drive a 1995 Jeep that gets about 16 mpg agggg! Any suggestions on the purchase vs. lease would be very much appreciated.

    This is my first post and I hope there to be many more in the future.

    Thanks
     
    #1 sicnarf315, May 15, 2006
  2. gena_mak

    gena_mak New Member

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    <div class='quotetop'>QUOTE(sicnarf315 @ May 15 2006, 02:02 PM) [snapback]255780[/snapback]</div>

    Leasing limits your mileage and no matter what in the end you pay more if you plan to buy the car at the end at the end of the lease.
    Otherwise, you can always buy it, pay it off and in 5-6 years trade it towards a new one (or sell it). I always do that and my payments are always low. Also, 5-6 years old car still has good value and you have the flexibility to drive it for some more years if circumstances are against buying a new car. Of course, the key to me is to trade it off in 5-6 years to get maximum value for the old car and minimum monthly payments for a new car.
    Another thing to consider, presumably keeping things as they are we will see gas prices going up. If this trend remains in place, we will be looking at strong demand for used (lower cost) hybrids. In 5 years, considering the pace of selling hybrids, used market for these cars will be somewhat dry and as a consequence, value and demand for them will be higher. So, in my opinion owning one now will yield some benefits later.

    Gene

    My 2 cents
     
    #2 gena_mak, May 15, 2006
  3. jonlink

    jonlink New Member

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    <div class='quotetop'>QUOTE(sicnarf315 @ May 15 2006, 02:02 PM) [snapback]255780[/snapback]</div>
    The tax credit is available only if you purchase the vehicle.
     
    #3 jonlink, May 15, 2006
  4. sicnarf315

    sicnarf315 New Member

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    <div class='quotetop'>QUOTE(jonlink @ May 15 2006, 02:24 PM) [snapback]255798[/snapback]</div>
    The following requirements must be met to claim the credit:

    *

    The original use of the vehicle commences with the taxpayer.
    *

    The vehicle is acquired for use or lease by the taxpayer, and not for resale.

    *

    The vehicle is used mostly in the United States.
    *

    The vehicle must be placed in service by the taxpayer after December 31, 2005 and must be purchased on or before December 31, 2010.


    That comes from www.fueleconomy.gov.

    I can actually write off the lease as a business expense because I own and operate an LLC (Limited Liability Corporation). Being able to write the lease off as an expense makes the lease more appealing than purchasing. I would just like to know what kind of terms dealers will make if you are leasing a Prius. There are some numbers on Toyota's website but they are unproportional to the cost of the vehicle.

    Thanks
     
    #4 sicnarf315, May 15, 2006
  5. jonlink

    jonlink New Member

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    <div class='quotetop'>QUOTE(sicnarf315 @ May 15 2006, 02:55 PM) [snapback]255815[/snapback]</div>
    I stand corrected, checking the IRS notice, a lease DOES qualify for the credit.
    You should talk to your tax advisor about the structure of this transaction to make sure you can take the credit and expense the lease.
     
    #5 jonlink, May 15, 2006
  6. sicnarf315

    sicnarf315 New Member

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    <div class='quotetop'>QUOTE(jonlink @ May 15 2006, 03:28 PM) [snapback]255828[/snapback]</div>
    The only problem is that they have not released the terms under which a lease qualifies for the tax credit. It seems to me that most people have purchased their Prius'. Still looking for someone who has leased their Prius.

    Thanks
     
    #6 sicnarf315, May 15, 2006
  7. jonlink

    jonlink New Member

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    <div class='quotetop'>QUOTE(sicnarf315 @ May 15 2006, 03:57 PM) [snapback]255852[/snapback]</div>
    Right, which is why it is important to have a tax professional help you make this decision. I've only had one busy season of tax experience, so I am by no means an expert. I'm not sure how the credit can be captured on 1065 to pass through to owners.
    Even if you did find someone who leased their Prius, you likely wouldn't have someone who is leasing it for business use, which is where you really have questions.
     
    #7 jonlink, May 15, 2006
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