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Researching different vehicles

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After researching different vehicles, quotes were obtained to purchase a Hyundai Sante Fe. 

Dan's Cars - Santa Fe Active Petrol 8 Speed Auto 2WD                   $48,990

Hyundai     - Santa Fe Highlander Petrol 8 Speed Auto 2WD         $47,890

To purchase the vehicle the following applies:

  • Annual servicing was estimated at $2,000
  • Registration, insurance and other expenses $1,800. 
  • It would be depreciated using the diminishing value method with an effective life of five years. 
  • Depreciation is tax deductible.

To lease the vehicle the following applies:

  • The business's current lease company has quoted $355 per week for a five-year lease for the vehicle. 
  • This includes all vehicle servicing, comprehensive insurance and roadside assistance. 
  • Monthly lease payments are fully tax deductible.

Based on the information provided, which option would you recommend? Explain why.

Reference no: EM133223530

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