Purchasing a Vehicle in your Business
When purchasing a vehicle in your business, whether or not you should buy a passenger vehicle or lease one is entirely up to you.
If you buy a vehicle you can claim a capital cost allowance otherwise known as tax depreciation up to $34,000 over several years.
For eligible zero emission vehicles the capital cost limit is $59,000. There is no difference between buying the vehicle in full or financing, you will own the vehicle and are then eligible to claim a capital cost allowance. However, if you finance your vehicle, you can also deduct an interest expense up to $300 a month whereas if you were to lease that same vehicle, you would be able to deduct up to $900 per month starting January 1, 2022.
Ultimately the deciding factor between the two depends on your individual business, it depends on how long you need a car for, how much your business can afford, and so on.
If you have any questions about whether or not you should buy or lease a vehicle in your business, call BBS Accounting CPA today!