re: If an employer pays full mileage rate, does leasing make sense?

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The "wrong" is the initial price of the car. Buy a loaded Lexus ES new for 40k or so. Nice enough to take clients out, and when she wants to upgrade in 4-5 years, you take over the Lexus and she gets something new. You are trying to think of ways to try to break even. Try to think about ways to get ahead.

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Not really the in-depth financial considerations I'm asking about, but thanks for your viewpoint, anyway.

How long do you plan to keep the car? Only 3-4 years, or do you expect to get it paid off and keep it forever?

I've run numbers multiple times on lease vs. purchase, and the numbers are always very close (within 1-2%), with advantage depending only on interest rate. However, all of these assessments assume the car will be unloaded at the lease end equivalent (whether buying or leasing). If you keep it long term, the depreciation shifts strongly in favor of purchasing. Also, keep in mind they do have higher mileage leases (15k/yr) which will give you a better idea/locked in residual rather than paying the mileage overage fee. Also, if the vehicle is kept in good shape, it may be worth more at term end than the residual, in which case you can trade it and potentially get the equity out of it.

For tax advantages, I'm not familiar since I don't write off my vehicles. However, I believe the lease has an advantage here since you are financing ONLY the depreciation allowing it to be fully written off. But, I honestly don't know.

As for vehicle, I'd recommend taking a look at the Infiniti M/Q70 or G/Q50. Cheaper and still very upscale in appearance.

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This isn't the OT, so frick off with that crap.

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Nerve struck, duly noted.

Lighten up Francis. I stand by my point that any work place which might suggest that an E Series needs to be used other than a MB dealer or a Third World dictatorship is trifling. There are way too many other fine motorcars out there as options.

I would have to be convinced a lease over outright purchase was the solution, it may well be but it would be the exception rather than the rule.

Thinking outside the box here, but can your wife drive a sentra or carrola to her destination, and then do a car service or über black for the client entertaining?

Just thinking outside the box to try to make this a positive cash flow situation.

I don't want my employer picking out my car. Why should she? Part of working remotely is treating your job as you'd treat your business.

I came here thinking the money board might have people on here who actually understand finance and taxes. Seems like I came on the wrong day. My bad.

Going back to the tax implications, can you depreciate/write off anything at all if you are compensated for mileage? Is she an independent contractor with an LLC or an employee? Maybe poodlebrain can give some input.

Does the OP's spouse have to turn in mileage reports? Or is she just paid so many miles a month?

If she turns in receipts/mileage log, then, she is not taxed on the reimbursements, however, she can't also write off the expenses.

If she does not turn in receipts/mileage log, then, she is taxed on the mileage payments, but she can write off expenses.

Question to the OP - is she a W-2 employee, partner in a partnership, 1099 contractor, etc? That makes a difference also for the tax treatment.

As to the lease/purchase question, leasing generally is more tax favorable if you are a business owner/partner/self-employed. If you are a W-2 employee getting reimbursed tax free, I'd probably buy the car.

I'd also worry about the mileage overages in a lease situation like the one you describe.

Also to the OP, I think the questions being raised by some on here in regards to the type of car required, and the fact that it's not a company car, are legitimate questions. If I'm having to drive a certain type of car for work, and the reimbursements I get are not enough to compensate for the car I'm forced to drive, it does become a financial issue.

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if my employer is requiring me to drive and more importantly maintain a 50k MB then they better be giving me a vehicle allowance on top of the mileage rate. you are going to be in the hole no matter what you choose if you try to drive a brand new benz on .55 a mile.

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That's exactly my point. Usually in these types of posistions, the car is provided, or, you get a car allowance.

All very good points here. However, whether you are reimbursed, or not, for mileage, does not determine your deductions. If you use a car in business, you either claim mileage or actual expenses. It has nothing to do with whether or not you are reimbursed, or a 1099 employee, or a partner, or owner.

The depreciation route, Section 529 deduction, etc... are taken if you itemize your deductions on the vehicle.

Once you choose one way or the other you can't switch back (I believe there are exceptions).

If you choose mileage, and a company reimburses you at full IRS rates, less than IRS rates, or more than IRS rates, you still have to report that reimbursement against your mileage claim.

I personally don't care what kind of car she gets. She earns more than twice what I earn and I earn in six figures, so she is well taken care of by her employer because she brings them the business. Her latest major deal was a $29 Million services contract.

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I came here thinking the money board might have people on here who actually understand finance and taxes. Seems like I came on the wrong day. My bad.

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If a new luxury car is required for her job they should pay for it or at least provide an allowance. If you don't want them to do that and just want to lease just because, it's your money to blow I guess.

But her getting paid mileage does not make leasing a better choice than buying used. If buying used is not permitted by her employer, she should get a car allowance.