Automotive
Buying or leasing a car as a physician: taxes, EVs, and the doctor-car trap
The first attending paycheck is when a lot of physicians buy the car they wanted in residency. There is nothing wrong with that, as long as it is a deliberate purchase and not a tax strategy that does not exist.
The tax reality
- Employed (W-2)
- Commuting to the hospital is personal; there is no deduction for the car. Buy or lease on the merits.
- Practice owner / 1099
- Business use is deductible in proportion to miles driven between work sites, to hospitals for rounds, and to meetings, not commuting from home to your main office. Keep a mileage log. Vehicles over 6,000 lb gross weight can be expensed faster under Section 179 and bonus depreciation, which is why large SUVs show up in physician parking lots. The business-use percentage still applies.
- Lease vs. buy
- Leasing suits people who want a new car every three years and drive under the mileage cap. Buying and keeping a car eight-plus years is cheaper over time. Luxury EVs have depreciated faster than comparable gas cars recently, which argues for leasing an EV and buying a gas or hybrid car.
If you are going electric
- Install a Level 2 charger at home ($800 to $2,500) before the car arrives. Hospital garages with chargers are rare and contested.
- Expect 70 to 80% of rated range at highway speed and 60 to 70% in winter. For call coverage across a region, buy more rated range than you think you need.
- Fuel and maintenance savings of roughly $1,200 to $2,500 a year offset part of the depreciation gap.
- Get an insurance quote first; EV repair costs push premiums up.
The doctor-car trap
A $120,000 car financed over 72 months is about $2,000 a month before insurance, which is the same money that would fund a backdoor Roth, a 457(b) contribution and a disability-insurance premium combined. The usual advice is to wait until loans are under control and retirement accounts are funded, then buy what you want with cash or a short loan. Physicians who follow it rarely regret the delay.
Tax treatment depends on your situation; confirm with your CPA. Sponsored placements are labeled and do not influence editorial content.