Since you’re unlikely to win a car …
[AJC: if you haven’t seen yesterday’s April Fools Day post, you can check it out here …]
… you may be thinking about buying one.
For example, Michael asks:
My business is going well and I’d like to update my old Ford Ranger pickup (160k miles) with something new. I saw that there is a bonus depreciation on vehicles over 6000 lbs GVW so I was looking to use that to save on taxes. I settled on a new Range Rover Sport. But here lies the issue…It makes me uncomfortable to think about how others will perceive me in the Rover. [But, if I buy another type of car] the lack of tax advantages would probably end up costing me more than the “pretentious” Rover.
Before we worry about what brand of car to buy, I would question why Michael’s buying a new car, rather than a new investment property.
Other than that, he should simply buy the cheapest car that meets his requirements.
You see, unless the vehicle specifically supports your business (think delivery truck), it’s just a depreciating liability (it doesn’t earn you any money, so it sure ain’t an asset!) …
… which means that any money that you don’t spend on it (or can claw back in tax deductions, etc.) is the next best thing to not spending the money in the first place!
Why spend money just to feel uncomfortable?!
Don’t spend more money just to get rid of the discomfort: spend less (e.g. buy a lower-profile American or Japanese car; one that costs less than 60% of the list price of a Rover) or none at all.
Why not put off buying the car, altogether?
On the other hand, if your business is producing enough cash to support its own growth and is producing enough to fund outside investments, there’s no reason why you shouldn’t spend what’s left …
… after all, that’s what money’s for, right?