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Grant Cardone Says, ‘If You’re Going To Buy A Car, Don’t’ — But This $158,000 Vehicle Is The Only One You Should Ever Own

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Grant Cardone, a successful billionaire in the real estate sector, recently offered insights on the financial implications of leasing versus buying vehicles. In a December Instagram reel titled “I lease all my vehicles except one,” Cardone advises against purchasing cars, describing it as a financially imprudent decision. He advocates for leasing as a more financially viable option, highlighting the rapid depreciation cars typically experience.

Despite his preference for leasing, Cardone makes an exception for the Range Rover, citing its compatibility with Section 179 of the IRS tax code, which enables substantial immediate depreciation write-offs for certain vehicles, depending on their size and weight. The Range Rover’s eligibility for these write-offs makes it a standout choice for people seeking tax advantages.

Cardone emphasizes the timing of the purchase, advising buying the Range Rover toward the end of the fiscal year. This strategy allows for an immediate write-off in the same year, even if the vehicle is not used. To illustrate his point, he said, “You can buy it Dec. 31 and write it off that year even though you didn’t drive the car. Boom. $158,000. You get to write it off that day.”

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Cardone elaborates on his approach to vehicle leasing, using the example of his Rolls-Royce Cullinan, which he leases for 24 months, never longer. This strategy enables him to fully deduct the lease payments from his income. He advises entrepreneurs to reduce their taxable income as much as possible by the end of the year. He also cautions viewers to ensure they can afford the lease payments, emphasizing that leasing an expensive vehicle should not be solely for the sake of a tax write-off.

The depreciation of new cars is a well-documented phenomenon. According to Lendingtree.com, new cars can lose up to 20% of their value in the first year. This rate of depreciation varies depending on the type of vehicle, with generic sedans typically depreciating faster than luxury models like the Porsche 911. While some rare supercars may appreciate over time, these are exceptions to the broader trend of automotive value decline.

Cardone is known for his outspoken views on car ownership. In a March post on X, he said, “Don’t hate the truth and don’t buy things disguised as assets when in reality they will depreciate and turn into liabilities. If you’re going to buy a car, don’t. Lease it for 2 years ONLY. As soon as you drive it off the lot it will have already lost value.”

His perspective challenges conventional views on car ownership, encouraging people to consider the financial implications of their choices. This approach is particularly relevant for entrepreneurs and business owners who can leverage tax codes like Section 179 to their advantage, making strategic decisions that can significantly impact their financial health.

Cardone’s expertise in real estate investment trusts (REITs) offers another avenue for savvy financial strategies. REITs are companies that own, operate or finance income-generating real estate and offer unique tax benefits. For instance, REITs are required to distribute at least 90% of their taxable income to shareholders as dividends, which are taxed at the individual level. This structure avoids the double taxation typically associated with dividends.

Investors in REITs can also benefit from reduced tax rates on qualified dividends and long-term capital gains. The Tax Cuts and Jobs Act of 2017 also introduced a 20% deduction on qualified business income from pass-through entities, which includes REIT dividends, further enhancing their attractiveness as an investment option.

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This article Grant Cardone Says, ‘If You’re Going To Buy A Car, Don’t’ — But This $158,000 Vehicle Is The Only One You Should Ever Own originally appeared on Benzinga.com

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