lease vs finance 2015 GT3 - tips and advice are welcome :)
#16
OK I hired a CPA who did a complete analysis of the two options. Lease at Porsche stupid rates for 36 months and 36000 miles or finance at 2.99%. If its a business deductable lease the lease option is a break even compared to financing at 2.99% option if the residual after 36 months is 85K . Every dollar the car is worth more than that after 36 months the lease is an advantage. This is the 30k foot view. You will have to trust me that we explored all the possible alternatives. I have to now make up the $1000 I paid a CPA to do the calculations Jon in Delaware
#17
OK I hired a CPA who did a complete analysis of the two options. Lease at Porsche stupid rates for 36 months and 36000 miles or finance at 2.99%. If its a business deductable lease the lease option is a break even compared to financing at 2.99% option if the residual after 36 months is 85K . Every dollar the car is worth more than that after 36 months the lease is an advantage. This is the 30k foot view. You will have to trust me that we explored all the possible alternatives. I have to now make up the $1000 I paid a CPA to do the calculations Jon in Delaware
#18
Rennlist Member
OK I hired a CPA who did a complete analysis of the two options. Lease at Porsche stupid rates for 36 months and 36000 miles or finance at 2.99%. If its a business deductable lease the lease option is a break even compared to financing at 2.99% option if the residual after 36 months is 85K . Every dollar the car is worth more than that after 36 months the lease is an advantage. This is the 30k foot view. You will have to trust me that we explored all the possible alternatives. I have to now make up the $1000 I paid a CPA to do the calculations Jon in Delaware
#19
OK I hired a CPA who did a complete analysis of the two options. Lease at Porsche stupid rates for 36 months and 36000 miles or finance at 2.99%. If its a business deductable lease the lease option is a break even compared to financing at 2.99% option if the residual after 36 months is 85K . Every dollar the car is worth more than that after 36 months the lease is an advantage. This is the 30k foot view. You will have to trust me that we explored all the possible alternatives. I have to now make up the $1000 I paid a CPA to do the calculations Jon in Delaware
I struggled over this for a month or so before I decided to buy the car. These cars hold thier value extremely well (not really reflected in PF residuals) & will be worth more than the residual at the end, so I say just buy the dang thang!!!
just my 2 pennies!
#20
Nordschleife Master
I was just about to post on this topic. Please help me understand.
The lease does not look attractive because the residuals are not aligned with the “should be” depreciation curve. I believe the residual percentage is 55% at 2 years. That’s a ridiculous number considering a GT3’s depreciation schedule. It would provide tons of equity in the lease but with interest rates so low, the lease seems like its not the best answer. So, the obvious alternative is the finance option. I know Porsche has 1.9% available, and some of the credit unions are even lower. Almost free money. Cant imagine the reason to pay in full under this scenario.
So someone that is pro-lease, please talk me into it. I have never done one, but always felt like I should be the ideal candidate. I could plot all my sports cars. Never owned less than 12 months, but never owned more than 24 months. Before I explored this, I was thinking/hoping it would make a lot of sense to just stroke a check for a one time lease payment based on something between 15-24 months, which I figured would be in the $50-70k range. Thoughts? If I will likely have the GT3 15-24 months, assuming a 1.9% finance option? There are lots of ways to look at it I guess. And there is always the possibility that this will be "the one" that keeps my attention longer
I have deliberately kept the RS out of my thought process for the financials. I may get a chance to buy one (I have a deposit down and told I will get one) but I very possibly may not, and/or decide I don't want one afterall.
The lease does not look attractive because the residuals are not aligned with the “should be” depreciation curve. I believe the residual percentage is 55% at 2 years. That’s a ridiculous number considering a GT3’s depreciation schedule. It would provide tons of equity in the lease but with interest rates so low, the lease seems like its not the best answer. So, the obvious alternative is the finance option. I know Porsche has 1.9% available, and some of the credit unions are even lower. Almost free money. Cant imagine the reason to pay in full under this scenario.
So someone that is pro-lease, please talk me into it. I have never done one, but always felt like I should be the ideal candidate. I could plot all my sports cars. Never owned less than 12 months, but never owned more than 24 months. Before I explored this, I was thinking/hoping it would make a lot of sense to just stroke a check for a one time lease payment based on something between 15-24 months, which I figured would be in the $50-70k range. Thoughts? If I will likely have the GT3 15-24 months, assuming a 1.9% finance option? There are lots of ways to look at it I guess. And there is always the possibility that this will be "the one" that keeps my attention longer
I have deliberately kept the RS out of my thought process for the financials. I may get a chance to buy one (I have a deposit down and told I will get one) but I very possibly may not, and/or decide I don't want one afterall.
#21
Mine was simple. Ca only charges sales tax on payment and residuals come in below market value. Since I plan to own the car long term, I buy at the end of the lease and pay less in sales tax. Furthermore depreciable amount that I can write off is small while I can write off entire lease payment.
#22
Mine was simple. Ca only charges sales tax on payment and residuals come in below market value. Since I plan to own the car long term, I buy at the end of the lease and pay less in sales tax. Furthermore depreciable amount that I can write off is small while I can write off entire lease payment.
#23
Three Wheelin'
Just be carful with Porsche Financial. On thier lease, they have a MRM (maximum Residual MSRP) of $151k. If your car's MSRP is more than $151k, that extra money is like paying over sticker....it does not residualize into the lease payment. So, whether your car stickers at $152k or $172k...your 36mos residual amount is $81.5k (based on 54% for 36mos/10k miles).
I struggled over this for a month or so before I decided to buy the car. These cars hold thier value extremely well (not really reflected in PF residuals) & will be worth more than the residual at the end, so I say just buy the dang thang!!!
just my 2 pennies!
I struggled over this for a month or so before I decided to buy the car. These cars hold thier value extremely well (not really reflected in PF residuals) & will be worth more than the residual at the end, so I say just buy the dang thang!!!
just my 2 pennies!
#24
Pro
The best way to look at it is simply look at the interest rates for both. Leading tends to have higher interest rates (I think PF is around 4.5% to 5.4% depending on if you are new to PF and assuming your dealer gives you the "buy rate" and doesn't mark it up (many do). There is a common fallacy that you can write off the entire lease payment on a high end sports car or exotic. Trust me I've done the leases with premier on Ferrari, Porsche and Lamborghini and unless you are in the business of driving sports cars and then doing articles on them for a business you Cannot write off the whole amount unless you don't mind a visit from the IRS. It is true you can write off more than you can with a purchase (typically justa small amount of depreciation can be written off). However with good credit you can finance a car like this for around 1.5% (chase is at 1.6 for 60 months). If you look at the amortization tables you can see what your balance is at the 24-36 month time frame and it will be less than the residual value for sure meaning you have more equity.
As far as the sale tax issue it varries state to state. Some states you can off set tax with a trade (not Ca I don't think)
As far as the sale tax issue it varries state to state. Some states you can off set tax with a trade (not Ca I don't think)
#25
GT3 player par excellence
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ok, you guys making this too esoteric and you think way too much.
tax write off
dep'n write off
how much risk you want to take chatting with IRS
front load
rear load
estimated mileage used
most of the financing institutions have a cadre of phd running models on this. it's like playing blk jack against the house. sure you win sometimes. but most lose. afterall, vegas is still around.... dont think you can WIN or cheat the system. i used to calc such for a living....
the bottom line is, can you REALLY afford it. it's a fundamentally deep question only YOU can answer and by afford i dont mean just cut a chk today. i mean kids tuition, your other hobbies, blah blah. you all know what i am talking about but many do not want to answer. if you dont know what i am talking about, you are not sophisticated enough to drive these expensive cars just yet. but i think if you have more than 1 brain cell left you know what i am getting at.
then the next question is if you can or if you are willing to afford it, do you want to pay now or pay later. you will ALWAYS pay, but you have a choice to deferred the pmt (finance/lease vs buy). while there may be saving here and there due to timing differences of buy vs lease and some tax issues, at the end of the day, your total $ delta in savings is really not enough to drive yourself crazy analyzing it.
if you can answer these two questions, it will all become clear to you how to acquire the car... either way, you will be bleeding.
tax write off
dep'n write off
how much risk you want to take chatting with IRS
front load
rear load
estimated mileage used
most of the financing institutions have a cadre of phd running models on this. it's like playing blk jack against the house. sure you win sometimes. but most lose. afterall, vegas is still around.... dont think you can WIN or cheat the system. i used to calc such for a living....
the bottom line is, can you REALLY afford it. it's a fundamentally deep question only YOU can answer and by afford i dont mean just cut a chk today. i mean kids tuition, your other hobbies, blah blah. you all know what i am talking about but many do not want to answer. if you dont know what i am talking about, you are not sophisticated enough to drive these expensive cars just yet. but i think if you have more than 1 brain cell left you know what i am getting at.
then the next question is if you can or if you are willing to afford it, do you want to pay now or pay later. you will ALWAYS pay, but you have a choice to deferred the pmt (finance/lease vs buy). while there may be saving here and there due to timing differences of buy vs lease and some tax issues, at the end of the day, your total $ delta in savings is really not enough to drive yourself crazy analyzing it.
if you can answer these two questions, it will all become clear to you how to acquire the car... either way, you will be bleeding.
#26
ok, you guys making this too esoteric and you think way too much.
tax write off
dep'n write off
how much risk you want to take chatting with IRS
front load
rear load
estimated mileage used
most of the financing institutions have a cadre of phd running models on this. it's like playing blk jack against the house. sure you win sometimes. but most lose. afterall, vegas is still around.... dont think you can WIN or cheat the system. i used to calc such for a living....
the bottom line is, can you REALLY afford it. it's a fundamentally deep question only YOU can answer and by afford i dont mean just cut a chk today. i mean kids tuition, your other hobbies, blah blah. you all know what i am talking about but many do not want to answer. if you dont know what i am talking about, you are not sophisticated enough to drive these expensive cars just yet. but i think if you have more than 1 brain cell left you know what i am getting at.
then the next question is if you can or if you are willing to afford it, do you want to pay now or pay later. you will ALWAYS pay, but you have a choice to deferred the pmt (finance/lease vs buy). while there may be saving here and there due to timing differences of buy vs lease and some tax issues, at the end of the day, your total $ delta in savings is really not enough to drive yourself crazy analyzing it.
if you can answer these two questions, it will all become clear to you how to acquire the car... either way, you will be bleeding.
tax write off
dep'n write off
how much risk you want to take chatting with IRS
front load
rear load
estimated mileage used
most of the financing institutions have a cadre of phd running models on this. it's like playing blk jack against the house. sure you win sometimes. but most lose. afterall, vegas is still around.... dont think you can WIN or cheat the system. i used to calc such for a living....
the bottom line is, can you REALLY afford it. it's a fundamentally deep question only YOU can answer and by afford i dont mean just cut a chk today. i mean kids tuition, your other hobbies, blah blah. you all know what i am talking about but many do not want to answer. if you dont know what i am talking about, you are not sophisticated enough to drive these expensive cars just yet. but i think if you have more than 1 brain cell left you know what i am getting at.
then the next question is if you can or if you are willing to afford it, do you want to pay now or pay later. you will ALWAYS pay, but you have a choice to deferred the pmt (finance/lease vs buy). while there may be saving here and there due to timing differences of buy vs lease and some tax issues, at the end of the day, your total $ delta in savings is really not enough to drive yourself crazy analyzing it.
if you can answer these two questions, it will all become clear to you how to acquire the car... either way, you will be bleeding.
#27
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I do suspect that quite a few people imagine they can afford the car, but aren't really in a position to make the financial commitment when the day comes. When my allocation came in, and I decided to pass on the car after my short test drive, supposedly 5 or 6 guys were in line with deposits after me. One of them took the allocation, but then bailed on it a week later, at which point I changed my mind and re-took the allocation. Meanwhile, the guy who had an allocation before me had his car arrive and decided not to take delivery. The car sat at the dealer for a whole month with no takers until somebody finally bought it.
#28
Nordschleife Master
I still think u can be someone that can afford this car, in the deepest sense, but not want to throw thousands down the drain by making the wrong finance vs. lease decision... to me it makes no sense to write a big check for a depreciating asset I will only have for 24 months or less... why not pay for the portion of that I am using... from a cash flow standpoint.... so to me its finance vs. lease... I just cant figure out why people lease this car, I cant make the math work...at least not with Porsche residuals and money factor... even for a short term ownership, I think better off financing at 1.9 or less...unless someone can demonstrate differently... my dealer couldn't.
#29
Rennlist Member
I still think u can be someone that can afford this car, in the deepest sense, but not want to throw thousands down the drain by making the wrong finance vs. lease decision... to me it makes no sense to write a big check for a depreciating asset I will only have for 24 months or less... why not pay for the portion of that I am using... from a cash flow standpoint.... so to me its finance vs. lease... I just cant figure out why people lease this car, I cant make the math work...at least not with Porsche residuals and money factor... even for a short term ownership, I think better off financing at 1.9 or less...unless someone can demonstrate differently... my dealer couldn't.
#30
GT3 player par excellence
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I do suspect that quite a few people imagine they can afford the car, but aren't really in a position to make the financial commitment when the day comes. When my allocation came in, and I decided to pass on the car after my short test drive, supposedly 5 or 6 guys were in line with deposits after me. One of them took the allocation, but then bailed on it a week later, at which point I changed my mind and re-took the allocation. Meanwhile, the guy who had an allocation before me had his car arrive and decided not to take delivery. The car sat at the dealer for a whole month with no takers until somebody finally bought it.
I still think u can be someone that can afford this car, in the deepest sense, but not want to throw thousands down the drain by making the wrong finance vs. lease decision... to me it makes no sense to write a big check for a depreciating asset I will only have for 24 months or less... why not pay for the portion of that I am using... from a cash flow standpoint.... so to me its finance vs. lease... I just cant figure out why people lease this car, I cant make the math work...at least not with Porsche residuals and money factor... even for a short term ownership, I think better off financing at 1.9 or less...unless someone can demonstrate differently... my dealer couldn't.
someone earlier said, compared the rates
24 months assuming no down on either method, lease used to be cheaper (ignore tax write off) for sure, especially BMW as they heavily subsidized their program. but PFS money factor for GT cars last round made no sense to lease. depending no your sales tax rate, and money factor i would think financing is cheaper even if you had to pay tax on entire amount.
you presumed you keep car 24 months so you only analyze the total CF of 24 months, inc dpn loss, tax, int so forth. but this logic is somewhat flawed. you had as many 993 as i have had gt. so come 24 months later, you plan to just quit porsche cold turkey? no, u will have another. but what will be the rate then? is it cheaper to keep the 991 for 48 months or to restart the clock with 992... this hobby is a sick disease you will not stop so how do you analyze total CF?
what if 992 is diesel or hybrid and you want the last of petro engine? keep 991 forever, how does that impact the fact that you only planned to lease 24 months and wrote a lease to maximize benefit for 24 months. now you have to "fix" the wrong decision......
take 20 lease programs and 20 finance programs and set various variables.
EX. lease two years buy it out and keep car vs finance five years. your total CF out will be less than 5-6k in difference but one is paid evenly over 5 years while lease is 24 pmts then a balloon at 25th month. remember the premise was that you can afford the car. so that then in this ex, the only difference is the time of the CF out while to total outflow is within 5-6% of total car price.
if you turn the lease back in at 24 months, to be fair comparing with a 5 yr finance. you will need to lease another car for 36 months. well you will have to add up those pmts too and the tax etc.
so in a truly apple apple comparison the delta is very small. and if i had to pick one i would minimize pmt today.
i ignored tax write off. b/c i do not write my cars off. i think 99.9% of the ppl writing it off is really pushing the edge of GAAP and last i heard IRS was not someone i want to have dinner with.....
then to add to the confusion. FOR ME
if it's a car i INTENT to keep, i'll just pay for it now
if it's a car i am not sure, i'll finance it
if it's a car i know i will not keep long, i will lease.
you know my record i haven't kept much. so the acquisition method optimized based on the INTENT of the ownership duration will only work if the INTENT is held true. i am willing to bet a lot of $ that most of us have no freaking idea how long we are keeping the car we now buying. half of us can't even figure out what dinner we are going to have tmo, how are we going to know anything about how long we keep the cars.
take a look at swap lease. it exists b/c ppl can't figure out how long to keep cars.
just decide if you want to pay now or later. and at the end, with very few exceptions, the $ difference will not be huge.
Last edited by mooty; 12-18-2014 at 01:15 AM.