Neil,
"Smart way to do it John. A plus to this as well, if you sold your car, for more than you had to pay for it, the "profit" is not taxable. If you are able to write off the payments, or the company pays for it, those payments are tax deductable. It's like a mini-RRSP. Win!"
Theoretically there would be tax, any gain on personal property over $1000, net gain on adjusted cost base is taxable. I say theoretically because most people are unaware and don’t make the claim on their taxes nor is the government looking hard this issue for now!
Ven, remember if you purchase a car and depreciate it as a business expense, any gain on disposal (sell price less un-depreciated is recapture of previous depreciation claimed (gain portion only). It is a good idea to sell to someone “you know” at the un-depreciated cost.
It is not clear cut what is best, an employer supplied lease auto or an allowance, both have their benefits. Employer supplied car assumes more risk for employer, allowance allows you to have more control .
The ideal deal is what benefits you the most.
