Automotive

Commission employee over 120k salary Is it right choice to lease a new car?

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  • Feb 14th, 2021 6:39 pm
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[OP]
Newbie
Oct 17, 2013
26 posts
17 upvotes
Mississauga

Commission employee over 120k salary Is it right choice to lease a new car?

Hello all.
I am so frugal and never bought a new car and never bought an expensive car in my life.

My avg gross is over 120k. And I am entitled t777 because of my job title.
People were saying I should lease a car instead of driving old INFINITI with 230k on it.

I narrowed down to Hyundai ioniq or Toyota Prius.
Idk I probably save $250 per month on gas compared to INFINITI. But I will be spending $470 per month car payment..

Does it make sense to lease a car or just keep used car?
I do love my INFINITI. I bought it for $4000 and I took care of it until now.

Never spend this much money in my life for such a stuff like car.

If it was a mortgage, I wouldn't hesitate it.

I already have my house and RRSP and TFSA is full now.
There is nothing I can really deduct tax at the moment and paying over 40k tax per year...
I wish I have kids but I am not married and still young not even 30 yet...


Ugh. Spending money to reduce tax. Idk.
It's still spending. But I spend less on gas.
Give me guidance please!!
Last edited by RyanS735 on Feb 7th, 2021 7:10 pm, edited 1 time in total.
53 replies
Deal Addict
Jul 21, 2009
1126 posts
571 upvotes
Toronto
Who are these "people" telling you to lease a new car and why does it bother you? Ask them to cover the car payments...
Deal Expert
User avatar
Jul 30, 2007
28538 posts
13895 upvotes
Toronto
Trudeau needs you to help out the Cdn economy. So, buy a new car Grinning Face With Smiling Eyes
[OP]
Newbie
Oct 17, 2013
26 posts
17 upvotes
Mississauga
My manager lol he lease too since he also can write off
Deal Addict
Mar 3, 2018
1843 posts
1837 upvotes
GTA
If your current vehicle is reliable then save your money. The two new cars you mentioned may actually be a step down in class and comfort.
[OP]
Newbie
Oct 17, 2013
26 posts
17 upvotes
Mississauga
It burns a lot of gas
I do drive 25k km per year.
Its little much
11L/100km and premium gas

Now I am comparing
Efficient used prius vs lease new prius
Deal Fanatic
User avatar
Jul 26, 2007
5277 posts
2842 upvotes
Toronto
The way you represented yourself by having so much left over money, and wanted to save gas, go buy a tesla.
[OP]
Newbie
Oct 17, 2013
26 posts
17 upvotes
Mississauga
tesla don't allow buy back. what's the point.
they know their car value well in used market.
it was my option until they did not let me buy back.
I would buy back and sell higher in used market with equity left over
Deal Fanatic
User avatar
Jul 26, 2007
5277 posts
2842 upvotes
Toronto
RyanS735 wrote: tesla don't allow buy back. what's the point.
they know their car value well in used market.
it was my option until they did not let me buy back.
I would buy back and sell higher in used market with equity left over
You can write off car payments on loan/financed too. Lease is just easier. I would look into financing too because usually the rates are lower then a lease.
Deal Addict
User avatar
Oct 12, 2007
4999 posts
2408 upvotes
Ottawa
If it was me (and it kind of is because I am driving a car with 250k kms on it and thinking about a replacement), I would consider my comfort, utility, and performance requirements and get something used but reasonably current - or hang in there with your old Infiniti. TBH, I expect a major shake-up in vehicles available in the market over the next five years as fleets become increasingly electrified and crossovers continue to push sedans out of the market. Greater choice of EVs can only be good for those of us considering one as their next vehicle. I suspect that my next vehicle will be one that I may only keep for five or six years - hopefully enough time for the market to have more EVs that will appeal to me.
Member
User avatar
Nov 30, 2007
251 posts
89 upvotes
You've made prudent financial decisions and your job now allows you to expense some of your vehicle. If you're spending $250 a month on gas that likely means you're on the road every day. Matter of time before your POS inifiniti breaks down. Seems like a no brainer.

If you don't care for cars, go spend some of your disposable income on one of your hobbies. If you don't have any hobbies... life must be boring.
Deal Addict
Aug 17, 2008
1149 posts
565 upvotes
Everyone has different priorities. Some people like nice cars and new cars. For others, as long as the car is reliable, they don't care if it is new. There are many examples of extraordinary rich people who drive very old and modest cars. Just as there are examples of people who can afford it, who drive expensive luxury cars.

You are ckearly frugal and don't like spending money just because you can afford it.

My thoughts:
* Spending money to save tax, does not really save money. The tax deduction is only part of what you spend, and the tax refund is about half of the deduction. And the deduction is only for the business use portion -- you need to track personal and business use kms. If you want to have a nicer car, the tax deductions are good, but it doesn't make sense to me to spend money to reduce taxes, as you will have less for the important things you mention like paying off mortgage faster or saving and investing.
* if you drive 25,000 km per year, most car leases will charge extra for extra kms.
* Your current car you bought used, and has taken care of you. But at some point, as it gets older, it will be time to replace it (especially since you need a car for your work). So assess when the car is getting too old and repairs are getting too frequent. How old is the car, and has it started needed more repairs?
* I don't think you can save $250 per month on gas by going to a new car. If you drive 25k per year, how much do you spend on gas each month.... I can't imagine it's more than $400-$500). And the cost of gas for the business use portion of your mileage is tax deductable.

At some point, you will need to replace your car. But don't feel pressured to do what others do. Everyone is different and everyone has different priorities. You prioritize saving and investing over consumption. When it's time for you to replace your car, you should probably look at spending more than $4,000 as you are at a different stage in your life now. Personally, I think used car prices are pretty high now, so I don't think buying used makes as much sense now as it may have in the past.
Last edited by multimut on Feb 7th, 2021 4:36 pm, edited 1 time in total.
Sr. Member
Jun 4, 2020
527 posts
442 upvotes
Clarington, ON
UrbanPoet wrote: edit: shoot.. .youre pulling in $120k and youre getting a prius?
sounds like you're level headed already.
I thought you were going to buy a BMW X5 or something. lol
It's a beige electric corolla...
Sr. Member
Jun 4, 2020
527 posts
442 upvotes
Clarington, ON
UrbanPoet wrote: pretty much. I thought OP was pondering if he should splurge on that new BMW/BENZ or something.
Toyota. . . Boring... But fiscally responsible.
I drive a toyota... Well... My wife does. I like to live life in the edge. My nissan has a cvt.
Deal Addict
Mar 2, 2017
1088 posts
2001 upvotes
Toronto
Spending money to reduce tax on something non income generating will be forever lost on me.

Leasing also happens to be the most widely misunderstood financing charge when it comes to cars that it's almost worthless debating, but for anyone wondering leasing is on average more expensive. Outliers remain for low residuals, etc.

OP, if you were into cars and were getting something that would truly make you happy then I'd say it's worth exploring, with the two shortlisted cars I'll take that high mileage infiniti (hopefully yours is rwd).
Realtor, Investor, CPA
[OP]
Newbie
Oct 17, 2013
26 posts
17 upvotes
Mississauga
Thanks for honest your opinion.
I decided to keep my car.
You guys are right.

120k yeah but I am frugal and this lead me early retirement and luckily I had this discipline since I was young. I am in my 20s and built good portfolio with investment including my couple properties and other investment.
I love saving and so as you guys. Thats why we are here.
This is first job title I can write off some of my expense.
I didn't know what to do.

My dad is retired but he used to make over 200k when he was working in finance but he kept his hyundai for 15years since brand new and spent it on investment instead.

Car is something big decision and you guys opinion helps a lot.

Most likely I might get a used Honda civic 2017 or something. Those I can pick up at good price.
Sr. Member
Aug 14, 2006
958 posts
89 upvotes
As someone who recently sold their Infiniti G37S and has a gross about 120K a year approximately as well, without a lease supplement from work l, get rid of that Infiniti if yours. I went from spending $260 to $350 a month in premium gas to about $120 a month.

No longer spending $1300 for a set of tires is nice as well. Parts for Infiniti always seem to be expensive too.

The car I bought was a 2019 Civic gently used.

With the cheaper gas and insurance the car is paying for itself!

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