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September 24th, 2002, 11:11 AM
I have seen several notes in the archives but wanted to ask the regulars to please address this topic again. Previous answers seemed to have been based more on opinion rather than any factual or financial data and/or tax implications.
Q1. For a new person entering the business what is the smartest financial move - buying or leasing your vehicles? For this question assume that a 2003 model vehicle (stretch and sedan) is under consideration. This question seems to me to be more relevant these days with very low/zero interest deals being offered on new vehicle purchases. Also, with a lease I am concerned about mileage caps. I would assume there are some tax advantages to leasing but have not explored this in depth yet. The Limo 101 books available through various sources do not properly address this topic either.
Q2. If you do plan to buy new, any pros/cons on ordering stretch limos directly from a Lincoln dealer rather buying directly from a a QVM? The Lincoln dealers tell me that my cost would be less and financing would be simpler if I order from them. I have not yet accumulated enough financial data to substantiate that claim, but thought some of you may have some previous experience to share in answering this question.

September 24th, 2002, 01:20 PM
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by TxLimoGuy:
I have seen several notes in the archives but wanted to ask the regulars to please address this topic again. Previous answers seemed to have been based more on opinion rather than any factual or financial data and/or tax implications.
Q1. For a new person entering the business what is the smartest financial move - buying or leasing your vehicles? For this question assume that a 2003 model vehicle (stretch and sedan) is under consideration. This question seems to me to be more relevant these days with very low/zero interest deals being offered on new vehicle purchases. Also, with a lease I am concerned about mileage caps. I would assume there are some tax advantages to leasing but have not explored this in depth yet. The Limo 101 books available through various sources do not properly address this topic either.
Q2. If you do plan to buy new, any pros/cons on ordering stretch limos directly from a Lincoln dealer rather buying directly from a a QVM? The Lincoln dealers tell me that my cost would be less and financing would be simpler if I order from them. I have not yet accumulated enough financial data to substantiate that claim, but thought some of you may have some previous experience to share in answering this question.<HR></BLOCKQUOTE>

It's been my experience that the purchase is cheaper in the long run. Leasing companies are middle men and they have to make money also. Go direct to Ford or your local bank. I just got 6.9% on a new 2003 Town Car Executive L model. You won't get a 0% loan for a business vehicle.
You will also get a better deal if you negotiate your purchase of a limo directly through the coachbuilder. You will have to buy the new sedan through a Lincoln dealer. You might be able to have your dealer buy the limo at the price you have negotiated and get the financing through Ford with little money down. The dealership makes a cut off your financing so they are usually open to this idea.

Wade Randolph

September 24th, 2002, 01:32 PM
Personally, we have bought each car we own directly from the coachbuilder. I am aware of one limo purchased through a local Lincoln dealership that originally came from Krystal Limousines. I became aware of it when the bank repo'd the car and the single car/man operation went under in just four months. When the bank told me they wanted to get their initial 80K back, I asked if the limo was 14k gold plated. I showed them our invoice for a purchase direct from the builder in the mid 40's. The dealer nearly DOUBLED the price. We finance cars over a three or four year period depending upon the economy at the time. After the first four years, we run them for another four for local use only - particularly weddings & quinceaneras which are probably big in TX as well. That second 4 years is gravy. If you set aside the money you earn in the first year of the gravy years, that becomes your downpayment on your next car (with interest of course if you invest it for the next three years in a CD or savings account. Major differences are the fact that lease payments are 100% deductible as a business expense where payments are not. However you still have the depreciation each year and back in the good ol' days you had the interest (damn government). That's my take on it.

September 25th, 2002, 07:47 AM
Always finance, never lease.

The way I do a purchase is direct from the supplier, not a dealer, dealers have to make a buck or else they wouldn't bother wanting to help you would they?

Ford finance and GMAC will loan you the money to buy directly from the manufacturer, so why bother with a dealer at all? The dealer is bound by the QVM and CMC agreements to service your new limo anyway...

September 26th, 2002, 06:30 AM
Appreciate the inputs.