Q7 - Lease or Buy?

I’m now self-employed and my CPA says I should lease my next car rather than buy, which I pretty much agree with from a tax planning standpoint.

However, I drive about 15k miles per year, and am undecided if it makes more sense to buy vs lease a Q7 Prestige with an MSRP of about $78k. I’ve been seeing the residual value is terrible if I go with 36/15k, and it appears to be quite a bit lower than a loaded X5.

At what point does one draw the line and decide to either lease or buy? I can’t seem to find that particular line myself.

I know I could get a premium plus and it’d increase the RV by 4% or so, and I would consider doing so if that helps with any of your input.


15k/yr isn’t that bad. I’d do what the CPA recommends.

In regards to the P+ vs Prestige, Im pretty sure the P+ doesn’t have a 4% better RV than a Prestige.

I owned a bmw 335i for 8 years, see below for details. Don’t own a German vehicle…ever.

15k/year is excellent; mine is 5k/year.

If I’m not mistaken, you can still deduct for depreciation on a car that you’ve purchased/financed, so doesn’t it end up being roughly equal (from a tax perspective) for lease vs. buy?

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Yes. You can deduct depreciation from a purchased car, but if I’m not mistaken, the inclusion amounts for luxury leases end up making leasing more favorable than buying. I’m no tax pro, though.

Lease a p+

Don’t buy a German car unless you’re willing to ride it until it’s resale value is in the teens or lower.

Have you considered going bigger and using section 179.

It’s insane that this option incentivices purchasing a huge truck but the deductions are very generous.

Lease it.
Then buy it if you like it.

I’d be very, very careful running a car through business expenses when it’s also/largely for personal use, especially an expensive car that isn’t always “necessary” for the business. You must account for personal vs. business use/mileage. Running the entire car through the business causes issues, and I’ve seen people get caught after I warned them.

IRC 179 is also limited or not followed by some states, so that’s something to consider on the state tax side.