Should I Lease A Vehicle To Drive For Uber?

Should I lease a vehicle for Uber?

Short answer is yes! Get a lease from a dealership. Do not get a lease from the Uber Xchange program. Their leasing is very expensive and forces you to drive a lot.

Why should I lease a vehicle?

  • You can deduct a majority of your payments as a business expense
  • You will have a newer car which qualifies you for more incentives
  • A Newer car equals higher ratings
  • You can return the vehicle after you are done

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Advantages of a lease

Leasing a new vehicle vs buying a vehicle


In this example let’s say that the vehicle’s MSRP is $22,000

The amazing thing about a lease is that you do not make payments on the whole $22,000. You only needs to make payments on a portion of the vehicles MSRP, which lowers your monthly expense compared to financing a vehicle. Also the interest is extremely low on a lease; interest rates are as low as .00083 percent.

You can choose to put a $0 down payment or a $2,000 down payment. With a $0 down payment, you will be able to keep more money in the bank and let your income offset the expense of the vehicle over time. With monthly payments, you will not notice a huge financial strain. However, you would with $22,000 leaving your account all at once.

With a down payment of $0, the payment will be around $300 a month. This can be compared to renting a vehicle for around $10 a day. If you decide to return the vehicle at the end of the lease, then you were able to use a new reliable vehicle for an expense of $10 dollars a day.

If you are worried about the monthly payment being too high, you can put $2,000 dollars down to lower the monthly payments. This will lower the payments to $200 a month. This can be compared to renting a vehicle for $7 a day (not including the down payment.)

If you decide to keep the vehicle, a majority of your payments went towards the principle of the car payments. At the end of the lease, you can then pay off the remaining balance of the vehicle.

In this example let’s say that you paid off $10,000 from the principle of the loan. You can then pay the remaining $12,000 in cash to avoid interest from a loan. Or you can take a loan at 1.9 percent to spread the money out even longer.

If you decide to keep the vehicle, you are able to spread the payments out for 3 years or longer instead of paying for it all at once. This will allow your income to offset the expense of the vehicle.

Leasing a vehicle offers a very low interest rate

 Leasing a vehicle has a much lower interest rate at .00083 percent, compared to financing a vehicle at 1.9 percent.   

More reliable / Less mechanical issues

It does not make financial sense to buy a used vehicle for $15,000 with more then 100,000 miles. Most vehicles only last for 150,000 until they need major repairs to keep them running. This means that you will be paying $15,000 with a lot of miles. Before you know it, the vehicle no longer works or it may accumulate costly mechanical expenses. These expenses include a new transmission, new engine, new fuel pump, and a new heater core. These repairs can cost thousands of dollars which can be avoided by leasing a new vehicle.

3 year / 36,000 mile warranty

A lease comes with a warranty so if anything goes wrong, the dealership will fix the issue for free. You do not get this benefit from buying an overpriced used vehicle. This is an extremely valuable offer and gives you peace of mind.

Less money up front

Example of buying a used vehicle for $15,000

It makes no financial sense to pay $15,000 upfront . By keeping the $15,000 in the bank, it puts less financial stress on your finances. Instead of a huge chuck of money leaving your account all at once, the payments will be spread out over time. Instead of $15,000 dollars leaving his account right away, you will have that money in the bank to put to good use.

 Write off percentage of lease as a business expense

It may be possible to write off part of the vehicle lease as a business expense. This will lower the actual amount you paid for the vehicle. This should also offset the small interest accrued from the lease(.00083 percent). You can deduct your lease payments as a business expense, but you can not deduct your car payment, when its a loan.

Gives you more options and flexibility

You  might only need the vehicle for 3 years and leasing a vehicle will allow you to do this. If you only need the vehicle for 3 years, you would have spent around $10,000 instead of $15,000 for a used vehicle. In this case, you would have saved $5,000 dollars.

At the end of the 3-year lease, you can decide to keep the vehicle or return the vehicle. This is a great option to have because your needs may change 3 years from now.

Fuel efficiency

A newer vehicle will always get better gas mileage than an older vehicle. Over time, there will be significant savings in fuel expense. This should be considered in the overall expense for purchasing a used vehicle vs. leasing a new vehicle.