Reimbursed Mileage - Lease it?

Ask the Hackrs Buy/Finance
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So I’m about to take on a new role where I will be driving roughly 12,000 miles a year in Florida.

I currently have a paid-for 2022 Tundra and a 36mo Lease on a Highlander that’s due end of this year.

I will be in a role that requires me to meet and likely drive high net-worth customers, so new luxury is ideal. Also need a larger SUV (think BMW X7 or Mercedes GLS).

Considering reimbursement is the IRS rate of roughly 62.5 cents per mile, if I drive 12000 a year that’s $7,500 a year (or $625 a month).

We plan to use this as our second family vehicle, so paying an extra $300-400 a month on top of the reimbursement is cool with us.

Am I thinking this correctly? And anyone recommend any larger luxury SUV lease deals I should consider?

Thanks!

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How much in excess mileage fees are you going to have to pay for all the personal miles above and beyond the 12k youre claiming?

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I think a 15000 or 18000 mile/year lease would cover it all together. We don’t drive many miles personally.

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My 2 cents:

HNW people are used to being shuttled around in Mercedes vans and big SUVs.

If you finance a Suburban, keep it clean and it has leather and captains chairs, then no one is walking around the virtually identical silhouette to see whether there’s a GMC or Cadillac badge upfront.

Lease deals have been virtually non-existent in the large SUV category except the occasional Infiniti QX80 or Jeep Wagoneer.

If you assume no HNW person is sitting in a third row and therefore you don’t need a third row, then the most “impressive” car you probably get is a Mercedes EQS.

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You’re not getting either one of those in a nice spec down to the $1-1,100 range @ 15K miles without a substantial cap cost reduction.

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A “lesser” brand with their nicest upholstery is much more aesthetically appealing than a GLS with MBtex.

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Mileage is not a tax credit, it merely erodes your tax basis.
So in your scenario you will pay taxes on your adjusted gross income minus the mileage.
Technically you will have somewhere in the 30% savings of the mileage amount since FL is already a zero state income tax anyways

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Unless its mileage reimbursement coming from an employer rather than a mileage deduction we are talking about.

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You really want to wow them, get a Sienna or Carnival with the first class lounge style seats?

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He is quoting the IRS mileage figures…maybe he works for IRS haha

In the event of mileage “reimbursement” from employer, that moneys are considered taxable income from what I understood

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I have seen lots of businesses reimburse at the irs rate, as thats what they claim on their taxes. I know my employer does when personal vehicles are used.

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Only if the reimbursement rate exceeds the irs reimbursement rate

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Yep the money isn’t taxable. And almost every business reimburses at the IRS rate. It’s tax free money for employees. I’m sure some terrible companies pay less but most just automatically reimburse at the IRS rate.

It’s 65.5 cents per mile. And for what’s it worth it goes up almost every year. So over the course of the lease I’d assume that reimbursement will go up a few cents a mile every year.

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Similar situation now.

Will be doing about 800-1000 miles a month to travel for contracted work 1 weekend a month.

@65.5 cents a miles, that’s about 500-650$ a trip.

@25 cents per mile penalty, and 5% tax, i figure that’s a net gain of about 40 cents a mile.