Automotive

2019 Subaru Crosstrek Sport lease or purchase

  • Last Updated:
  • Feb 8th, 2019 12:04 am
[OP]
Newbie
Oct 28, 2003
7 posts
Vaughan

2019 Subaru Crosstrek Sport lease or purchase

I'm looking to get a 2019 Subaru Crosstrek Sport with Eyesight and I know the question I'm going to ask has probably been bounced around a thousand times but I'm hoping I can get a definitive answer for my particular case.

This car is for my wife who is incorporated self employed. She has the money in her company to purchase the car outright but would it be beneficial for her to lease the car for 4 years and then trade in? OR would it be best to purchase the car get the 5-7 year extended warranty and perhaps sell the car after 4-5 years.

The residual value on the car would be 46% after 4 years. Lease rate 3.99% 48 months, 2.99% 36 months Not sure if that helps.

I'm sure I'm missing a bunch of information but any help really appreciated.
7 replies
Deal Addict
Sep 1, 2004
3741 posts
2368 upvotes
Talk to your tax accountant before you decide.

Leasing that car under company would mean absolutely NO personal usage. If you can't proved that when CRA calls, it's a lot of trouble.

Buying it personally and doing a log book and claim mileage would be easier way to go.
https://www.canada.ca/en/revenue-agency ... rates.html

Again ask your tax accountant for advice. You can write off whatever you want until CRA coming knocking.
[OP]
Newbie
Oct 28, 2003
7 posts
Vaughan
Xtrema, thanks for the reply. She actually drives it 99% of the time for work. On weekends we use my car.

I asked the accountant and he said 6 of 1 half a dozen of the other?? He says he prefers to own his vehicles as it's something tangible as opposed to just renting a car.

What do you think about owning it and getting extended warranty? It's appx. $1900 for 160km 7 year warranty.
Deal Addict
Sep 1, 2004
3741 posts
2368 upvotes
Well, sounds like he doesn't care doing either.

And his 2nd part of the comment sound more like a personal belief than actual legal tax advice. Also, lease has mileage limits, if your business incurs a lot of mileage, owning is better.

If you own under company, you will claim CCA, not sure if rule changed under some new Liberal rules.

If you lease under company, you will claim lease payments.

And if your tax accountant is ok with vehicle under company and survive a personal use challenge by CRA, go crazy.

Also check your insurance, it could be more if vehicle is owned by company. That's why I prefer personal vehicle and logbook/mileage route. Way simpler and I get what I personally want.
[OP]
Newbie
Oct 28, 2003
7 posts
Vaughan
Thanks again for the reply Xtrema. Really helpful information.

You're answer seems to suggest the same thing my accountant was saying. 6 of 1 half dozen of the other? Unless I'm reading this wrong.

1) If you own under company, you will claim CCA, not sure if rule changed under some new Liberal rules.
2) If you lease under company, you will claim lease payments.

So which is better? Buy or Lease?

Now when you say you prefer personal vehicle and logbook/mileage route. Do you buy or lease the vehicle?
Deal Addict
Sep 1, 2004
3741 posts
2368 upvotes
I lease and write off mileages. Again I like that because there is less rule around what kind of car you can or can't own/lease and such.

1) or 2). Depends on how much income you want to office set.

CCA used to be 30% of the car per year. So write off a lot the 1sr year and less on each year after. I also heard something changed on this but not sure about what it is.

Lease would be same for duration of the term.

Again check with tax advisor which is way is better to go. Remember write off isn't free money. It's pre-tax spending. So if your company don't have income that's taxed, this buys you nothing for all the work.
[OP]
Newbie
Oct 28, 2003
7 posts
Vaughan
Hope you don't mind as I've always bought used cars and driven them till they die. I like the idea of having a new car every 3 to 4 years.

So you lease the car personally because you don't really want to own the vehicle and perhaps like the idea of getting a new vehicle every 3 to 4 years AND with regards to expensing the vehicle, owning makes it easier to write off the car expense by recording the mileage and claiming car allowance.

1) Do you ever buy your cars out? And if you do, do you increase payments purposely to decrease buyback (increase residual)? Or am I out too lunch?
2) How long do you usually lease for? Looking at the Crosstrek 3 years 2.99% 4 years 3.99% appx. 31k purchase.
Deal Guru
Jan 27, 2006
11495 posts
4746 upvotes
Vancouver, BC
jakedeals wrote:
Feb 7th, 2019 5:08 pm
Xtrema, thanks for the reply. She actually drives it 99% of the time for work. On weekends we use my car.

I asked the accountant and he said 6 of 1 half a dozen of the other?? He says he prefers to own his vehicles as it's something tangible as opposed to just renting a car.

What do you think about owning it and getting extended warranty? It's appx. $1900 for 160km 7 year warranty.
If the accountant says buy the car and charge the mileage, then go with that - I'm sure they have run the numbers a thousand and one times.

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