NEW YORK - A new car might be a status symbol or image statement in your personal life. But if you plan to use it for your business, you should remember that it's also a piece of equipment, and therefore deserves some thoughtful consideration before you plunk down money on a sales or leasing contract.

        “Look at the economics of the situation,” says Barbara Weltman, an attorney in Millwood, N.Y., and author of J.K. Lasser's New Rules for Small Business Taxes.

        Many people buy cars, even for their businesses, on emotion. But you need to think about how much any new vehicle will cost you to buy and operate - or whether it might actually save you some money. As you comparison shop, you need to think about the financial pros and cons of each vehicle.

        For example, Ms. Weltman noted that under new federal tax laws, a business that buys a vehicle that weighs more than 6,000 pounds - and some SUVs and pickup trucks fit that category - can deduct up front $7,660 of the purchase price in the first year of ownership. Under 6,000 pounds, the deduction falls to $3,060. A few pounds less could cost you hundreds of dollars or more in taxes.

        There's also the question of buying vs. leasing. The big question to ask: How long do you expect to have the car?

        “If you're talking short-term, two to three years, then leasing is probably better than buying,” Ms. Weltman said.

        Many small-business owners seem to be leaning toward leasing. Steve Kalafer, chairman of Flemington Car & Truck Co. in Flemington, N.J., said 75 percent of the cars sold to small-business owners at his company are leased.

        “That's driven by the advice of their accountants, who tell them they should be investing their cash into their business instead of into their autos,” he said.

        But Mr. Kalafer said some business owners have also been drawn to buying because of zero percent financing.

        Another consideration is who should own the car. If your firm is a corporation or partnership, would it make more sense to have the business own the car? One factor is whether the company could get a more favorable insurance rate than you're able to get personally.

        Before you even look for a car, you'll likely find it pays to familiarize yourself with how tax laws treat vehicles used in a business.

        Many company owners use their cars for personal as well as company purposes. That affects how much of the vehicle's price and expenses that can be deducted on a business income tax return.

        Under the Internal Revenue Code, you must determine how much of the vehicle's use is for business purposes, and how much for personal purposes. If, for example, you use it 60 percent for business and 40 percent for family errands and trips, then you can deduct only 60 percent of your expenses.

        You can find more information in a business tax guide at a bookstore, or by looking at IRS Publication 463, Travel, Entertainment, Gift and Car Expenses. You can get a copy at the IRS Web site, www.irs .gov, or by calling (800) TAX-FORM - (800) 829-3676. Alternatively, you can also get the publication faxed to you by calling (703) 368-9694.

Seminar helps you get handle on money
P&G brewing for new generation
Bureau going after big conventions
KFC, at 50, keeps on cluckin'
Domino's may add delivery charge
Drive-in movie's back
Kmart banking on Joe Boxer's appeal
Company car: Think of taxes
Flexibility can tame customers' fickleness
Tristate Business Notebook
This Week's Business Meetings
Commercial Real Estate Projects