The standard mileage rate can be used whether you own or lease the vehicle. This substantially reduces paperwork necessary to account for your business use. If you lease the vehicle, the election to use the standard mileage rate must be made in the first year and is permanent for the term of the lease, including renewals.

If you own the vehicle, you can elect the standard mileage rate in the first year and then switch to the actual expense method in a later year. However, you must calculate the depreciation using the straight-line method.

If you finance the purchase of a vehicle and elect to use the actual expense method for determining your deduction, the interest you pay based on your business use percentage is deductible from your business income.

When you trade in a leased vehicle, there is no depreciation recapture to consider.

Leased vehicles often require a lower down payment and smaller monthly payments.