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Car Leasing vs. Car Purchasing
For corporate users, which vehicle purchase option is the best choice for company's interests? The following table lists all the relevant financial and management analysis for your easy understanding and the best judgment.
Comparison with long-term car leasing and vehicle purchasing
 
Vehicle
purchase 
by cash
Car Leasing
Financial Advantages
No need to pay with amounts of cash in one time gives you flexibility in financial planning.
X
O
No handling trivial tax and accounting affairs
X
O
Avoiding difficulty of compiling annual budget and account settlement
X
O
No limitation of vehicle depreciation after 5 years and 1 year residual value as a fixed asset. Provide accelerated depreciation benefit.
X
O
No limitation that vehicle listed as depreciation expense can't exceed NT$ 2.5 million.
X
O
Fixed vehicle expense to simplify financial planning and cost control.
X
O
5% business tax can be used to deduct monthly tax
X
O
Monthly rental can be used to deduct expense
X
O
No worries of loss on vehicle price
X
O
Administrative Advantages
Handling regular maintenance, repair and warranty claims through the specialist.
X
O
Substitution cars provided services (on the basis of contract agreement).
X
O
Handling payment of annual vehicle license tax, fuel tax, and regular inspection through the specialist.
X
O
Handling car insurance and its renewal through the specialist.
X
O
Handling accidents, coordination and car insurance claim through the specialist.
X
O
Handling traffic tickets through the specialist.
X
O
Confidential vehicle information and identity security your privacy.
X
O
Vehicle certificates are in great management.
X
O
Handling the vehicle-selling through the specialist.
X
O
365 days vehicle management gives you a care-free service.
X
O
36-month Car Leasing vs. Vehicle Purchase with Cash
 ★ (Take Benz E300 Avantgarde 3.0 for example)
Vehicle price: NT$3,350,000   Monthly rent of tax excluded: NT$ 74,500
Item Vehicle purchase by cash Car leasing
Expenses:

1. Vehicle payment (tax included)/deposit)

NT$3,350,000

NT$0

2. Total rent (tax included)

NT$0

NT$2,816,100

3. License tax & fuel tax

NT$67,230

NT$0

4. Insurance fee
(Comprehensive Coverage)

NT$569,046

NT$0

5. Maintenance fee

NT$300,000

NT$0

Sum of items 1-5(A)

NT$4,286,276

NT$2,816,100

Deductions:
6. Asset residual value

NT$1,435,714

NT$0

7. 5% deduction of invoice tax

NT$0

NT$134,100

8. 17% deduction of business
    income tax

NT$320,667

NT$455,940

9. Reinvestment earning tax

NT$0

NT$201,000

6. Sum of items 6-9(B)

NT$1,756,381

NT$791,040

Net cash outflow (A)-(B)

NT$2,529,895

NT$2,025,060

Average monthly expenses

NT$70,275

NT$56,252

Description:
A. Purchase with cash
1. Business income tax 17% deduction:
    [NT$2,500,000/(5+1)*3+NT$67,230+NT$569,046]*0.17=NT$320,667
2. Residual value of fixed asset: deprecitaion of fixed asset deducts tax year by year to only   
    NT$2.5 million in 5 years.
B. Long-term car leasing
1. Monthly rental: NT$ 74,500*1.05*36=NT$2,816,100
2. Invoice tax deduction 5%: NT$2,682,000 (Rental for 3 years of tax excluded) *0.05=NT$134,100
3. Business income tax deduction 17%: NT$2,682,000 (Rental for 3 years of tax excluded) *0.17=NT$455,940
4. Reinvestment earning tax deduction: NT$3,350,000*2%*3 year=NT$201,000