{"id":21379,"date":"2026-07-04T12:30:00","date_gmt":"2026-07-04T16:30:00","guid":{"rendered":"https:\/\/dev.impots-ici.com\/buy-or-lease-a-car\/"},"modified":"2026-07-12T18:50:53","modified_gmt":"2026-07-12T22:50:53","slug":"buy-or-lease-a-car","status":"publish","type":"post","link":"https:\/\/www.impots-ici.com\/en\/buy-or-lease-a-car\/","title":{"rendered":"Buy or lease a car?"},"content":{"rendered":"

Buying or leasing a vehicle should not be decided from the monthly payment alone. Expected ownership period, mileage, business use, financing costs, resale value and annual tax limits can lead to very different results.<\/span><\/p>\n

For a lightly used car, fixed cost and flexibility often matter more than a tax deduction. For a business or self-employed person, the choice also involves personal ownership, corporate ownership and kilometre-based reimbursement.<\/span><\/p>\n

Compare total cost rather than the payment<\/span><\/h2>\n

A purchase includes price, interest, maintenance, insurance, taxes and resale value. A lease includes payments, down payment, fees, mileage limits, wear and end-of-term charges. A lower payment may conceal a longer term or significant residual value.<\/span><\/p>\n

The comparison should use the same period and mileage. If the vehicle will be kept for many years, buying can spread the cost beyond the financing term. If needs change frequently, leasing may provide flexibility in exchange for contractual restrictions.<\/span><\/p>\n

Calculate the portion actually used to earn income<\/span><\/h2>\n

A self-employed person does not automatically deduct all vehicle costs because the car is occasionally used to meet clients. Expenses are allocated based on business kilometres compared with total kilometres. The normal trip between home and a regular place of work is generally personal.<\/span><\/p>\n

A travel log should show the date, destination, purpose and distance. Fuel, repairs, insurance, registration, interest and lease invoices should also be retained.<\/span><\/p>\n

Understand tax limits on purchases and leases<\/span><\/h2>\n

For an acquired passenger vehicle, the cost eligible for capital cost allowance is capped under a limit that is updated periodically. Deductible interest may also be limited. For a leased vehicle, the eligible expense is subject to a ceiling and a formula that considers the vehicle\u2019s value.<\/span><\/p>\n

The limits change over time and should be checked for the acquisition year or new lease. Buying a more expensive vehicle solely for a deduction does not make the excess cost deductible.<\/span><\/p>\n