№ 8 · Buy vs. Lease
Buy or lease? The whole answer, taxes included.
Every buy-vs-lease calculator on the internet compares payments. Almost none of them compare what the tax code does to each side — depreciation and the luxury-auto caps on a purchase, the deduction (and the IRS’s quiet claw-back, the inclusion amount) on a lease, and the tax bill hiding in the resale. Here’s the whole picture over the same window.
Built on current law — 100% bonus depreciation under the One Big Beautiful Bill Act, the IRS passenger-auto caps, and the lease inclusion table. Personal comparisons work too — just set business use to zero.
The deal on the table
Where the money goes
Both bars cover the same window. Navy is what each path really costs after everything; turquoise is what the tax code hands back; blue is the equity you get back at resale (buy side only).
Here’s how it lands
The full arithmetic ▶
Your moves
Numbers without a next step are just trivia. Here’s what this comparison says to do.
What this comparison assumes — out in the open
- Same window, same vehicle. The buy side is measured over the lease term you picked, ending with a sale at your resale estimate. If you’d actually keep the vehicle ten years, buying looks better than shown — that’s the biggest lever in this whole comparison.
- Gas, insurance, and maintenance are left out because they’re roughly the same either way. Leases that include maintenance, or lease-end wear-and-tear charges, break that tie — read the fine print.
- Buy-side depreciation: 100% bonus under the One Big Beautiful Bill Act (bought and placed in service on or after January 20, 2025), with the IRS passenger-auto caps ($20,200 / $19,600 / $11,800 / $7,060, scaled to business use). The 2026 cap and inclusion tables aren’t published yet, so 2026 deals use the 2025 tables until they land. Heavy SUVs over 6,000 lb escape the caps — §179 up to $32,000 plus bonus on the rest.
- Selling triggers a tax bill the dealer never mentions: depreciation you took gets recaptured as income when the resale price exceeds what’s left of the business basis. It’s in the buy-side math here — it’s why the year-one write-off isn’t free money. (The math nets deduction and recapture dollar-for-dollar; the cash-flow benefit of deducting now and repaying at sale isn’t separately valued.)
- Lease inclusion amount: leased passenger autos over $62,000 of value add a small IRS-set amount back to income each year (it trims the lease deduction). It’s in the math, from the IRS table. Heavy SUVs over 6,000 lb aren’t subject to it.
- Deductions are scaled to business-use percentage on both sides, and the write-offs assume more than 50% business use. The S-corp personal-use W-2 add-back applies similarly to a company-bought or company-leased vehicle, so it roughly cancels out of this comparison — our Business Vehicle tool (№ 6) models it in full.
- Sole props: deductions also trim self-employment tax (about 14 cents on the dollar, under the Social Security wage base); depreciation recapture does not pay SE tax.
- Not modeled: the new OBBBA personal car-loan interest deduction for qualifying new vehicles (ask us if you’re buying new for personal use), lease mileage overage fees, money-factor vs. APR games, and disposition fees. Review items, all of them.
Got the dealer’s worksheet? Send us both columns.
Dealers are good at making the number they want you to pick look best. We’re good at finding the number that’s actually best — after the write-off, after the recapture, after the fine print. Send this over before you sign and we’ll pressure-test the whole deal.
Reach your Delta team at (260) 440-2747 or info@deltacpagroup.com and we’ll walk through it with you.
Thank you,
Amy Grego, CPA Delta CPA Group, LLC · (260) 440-2747