Saturday, Apr 11, 2009 at 15:12
Each time a vehicle or asset is purchased, the method of payment can be either lease, loan or using your own cash. Every year,
well with me anyway, I am in a slightly different circumstance as I work in a rythmic, volatile, unpredictable industry, the building one.
Leasing has its advantages when cash is scarce or used for other business requirements but generally the interest rate is slightly higher, the amount the interest is calculated on is higher (because the deposit is in effect the residual) but the payments are 100% deductable.
Personal Loans are also OK but I think they need to be a "chattel mortgage" to obtain full tax deduction benefits. You have to find the deposit but you can often get a lower interest rate, buy a good second hand vehicle and I think depreciation and the interest is the tax deduction.
At the time of purchase, you need to do the sums, assess where you are financially and where you expect to be financially at the end of the borrowing period. If we all had crystal balls we'd all know what the future holds and what to do but then it would all be a bit boring.
Whatever you decide, it is only a car and a relative small amount. You are not marrying the car or finance organisation and if it doesn't work out it is easy, although slightly expensive, to get out of provided you have a back up plan in place.
I also would not say I am financially
well off. What I have got has nothing to do with luck and more to do with hard work, sacrifice and knowing when to save and when to spend, but I made a lot of mistakes along the journey.
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