Austin James is a manager . His contract of employment requires his employer to give him an automobile for personal use. Two years ago, the company purchased an automobile for that which cost $43,000. Austin pays all costs to operate the vehicle. He is not required to use the vehicle for any of her employment duties.

The employment contract also stipulates that Austin may, if he chooses, can purchase the vehicle at any time for a price equal to the depreciated value of the car. The automobiles depreciated value is now $20,000.

Austin is thinking of purchasing the car. His bank is willing to loan the money at 6% interest. The car is in good condition. If he makes the acquisition, he intends to use the car for at least three more years. A friend who is in the automobile business, has informed that, subject to any mechanical problems, the car should have a resale value of $8,000 three years from now.

Austin marginal income tax rate is 45%.

Required:

Should Austin purchase the car at this time, or continue to use it as an company-owned vehicle?

(*Question related to Tax think of stand by charges formula = Cost of Car X 2% X 12 Months)