Entrepreneurship & Small Business

Buying new car for business - Lease or Finance or Cash ?

  • Last Updated:
  • Jul 14th, 2021 7:07 pm
Dec 4, 2014
59 posts
Toronto, ON

Buying new car for business - Lease or Finance or Cash ?

Hi Experts ,

I need a vehicle for my business (an SUV) . It will be mostly a business expense (maybe I will use about 50% for personal use) .

For tax wrightoff purpose , what do you think makes most sense ? Finance or Lease or Cash ?

2 replies
Sr. Member
May 29, 2012
612 posts
Southern Ontario
doesn't matter about it being written off how you pay, its more about the use of the vehicle as to how much you can write off against the business.
If you pay cash you can only depreciate it by the rate CRA specifies.
If lease it, you can write off the lease payments for that year, assuming % of business use

So the real question is when do you want to recognize the tax savings for your business
Jul 13, 2021
6 posts
Yes as above said. Think of it as the same financial decision, buying wise, the write off is another aspect entirely.

I paid cash to pay the sales tax up front and claim it back immediately, which is nice so I can focus on other more important things.

In hindsight I would’ve financed it and invested the money, but since I wasn’t investing at the time and just had extra cash it made more sense.

Talk to your accountant to see what they suggest for your specific scenario


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