What are the tax advantages to this type of lease. would you account for these as an off-balance sheet lease?Nathan said:There are tax advantages to leasing though.
I'm working with someone now who may be able to offer members of Contractors Chat Room leases on commercial vehicles at a great rate... and $1 buy out at the end of the lease! You can put signage on the vehicle and don't have to worry about mileage because you will own it for $1 at the end of your lease term.
Does anyone lease a vehicle to thier subs or employees? My sub drives his personal vehicle and it does not look professional. I have an oportunity to buy 2 late model (1999) Ford E250 vans which are identical and white for $1,500 each.Here is an idea that will accomplish two things the first is protection the second is those tax advantages Nate spoke of:.
This will be just like a regular lease anywhere else. They are responsible for licensing, insurance, maintenance etc.. In turn for cheap rental or lease rate my company name will be on the side of a nicer truck than they would normally have.I see a few red flags. One being if these are subs - they are not employees, meaning they should have their own business license and insurance. Driving in your vehicle with your company name is a flag. ‘Also - whose name is the vehicle going to be registered in?
I am careful of the fine line between employees and subs that is why I will lease the vans to them. I provide about 95% of their work and they get paid on commission providing their own insurance, tools and other resources. They have no set hours but they know what is expected of them as professionals.There are a few situations that could go wrong with this deal. Your best bet is to buy the vehicles and sell them to the subs. You could always hold the note - but becareful with your signs on their vehicles.
License and insurance will be in their name. I am not worried about them driving around with my company name. We have gotten all of the “wildness” out of our systems (and managed to stay out of prison unlike our past acquaintances) and are now family men with young children. I have complete trust in these guys and they are completely on board with my vision of the future including franchising or license agreements.How about when they are not working for you - and driving around with your company name on the truck and they get in an accident. .