ScottMellor

Hi Jaimie140
We normally lease all of our company vehicles for tax purposes.
If I buy the car personally and then lease it from myself, I get to own the car, the corporation still gets the tax benefit and I get a stream of income from the corporation.
I do a similar thing where the corporation pays me rent on my home office.

tstafford

Huh. Had never thought about leasing (or financing) a GT car.

How do the finance companies feel about the over MSRP aspect of GT cars? Will they finance an RS at $250K purchase price when the sticker says $200K? Do they care?

Spyerx

Ianswer is it depends. Have to run the numbers and compare the scenarios. As mentioned sales tax in places like cal really favors leasing. Money factors should be low or near zero. For a business it may be favorable to lease and then buy in future.

Mech33

At the typical cost of money on a lease, after 2 years you've essentially matched the cost of sales tax on the full purchase price anyway...

WernerE

Pretty sure Porsche will only offer lease financing on the MSRP, on which the residual is based. In other words, any amount over MSRP will be paid in cash (and subject to sales tax as cap. cost reduction).

I'll give you another advantage of leasing: Let's say the next 911 is a hybrid that is a "MUST HAVE" vehicle, driving the value of earlier models down lower than expected. At the end of the lease, the residual is HIGHER than FMV and you WALK. For the customer who paid cash or financed, you're the one suffering the extra depreciation caused by the new models.

Under a lease, Porsche is guaranteeing your car is worth XXX after 2-3 years. You don't get that protection paying cash (or financing).

Best example: Toyota launched a Supra in the 90s for something like $50k MSRP. Didn't sell. Toyota dropped the MSRP overnight by $10k. If you had bought the car (vs. leased), you just suffered a $10k hit on resale. Leasing customers just turned in their car at lease end. If FMV is greater than residual, you buy the car to capture the equity. It's like walking into a Vegas casino where the rules are: Heads I win, Tails we tie.

mass27

People who still think there are tax benefits to leasing vs buying (if you own your Company) need to find a more astute CPA.

There are other advantages to leasing that are not listed in this discussion, but to keep this on point, buying is better (in the financial definition of better) than leasing in the majority of circumstances and especially in this particular case of a GT3, disregarding TVM, opportunity cost, and inflation.

991carreradriver

Respectfully, I am a CPA in public practice and I don't think you know what you are talking about.
There are leasing companies that use other than a "closed end" lease format, which essentially means that the lessee is the owner with all the tax advantages attributable to leasing, not withstanding IRC Sec 280(f) adjustments.

gago1101

LOL

mooty

math doesnt lie
finance does lie
books can be cooked
FS are fungible
if you haven' figure about out.....

that said: is leasing good? that answer is different for everyone.
some cite tax beneift
some cite end lease risks
blah blah..

what if i tell you i can generate you 12% risk free return on your money? then you would want to conserve that capital and make as little pmt as you can. forget tax benefit. the 12% return will deal with that.... yes hypothetical... but just to illustrate there is no CORRECT answer.

and if one wants to "justify" why he prefer to lease or to finance or to pay cash..... by seeking consensus, then so be it...

gago1101

A GT car purchase is an emotional decision, not practical by any means, even for an enthusiast. I wanna know I own it vs. renting/leasing it. If one is going to flip... wont go there.

Nick

It was written for an audience that knows something about leasing cars. Apparently your not one. No need to attack me.

My .2 GT3 will be delivered in about 30 days. I am in a charitable mood and chose not to return fire. Do I need to explain those terms to you?

WernerE

I've given presentations to dealers on how to increase their lease penetration rates. Just because it's favorable to dealers doesn't mean it can't also be a win for customers. In most cases, it's a win-win proposition. If I were a dealer, I'd structure the pay plan to include a higher commission on a lease deal. Why? With a lease, you have a guaranteed customer coming back every 2-3 years.

Something J. Paul Getty said: “If it appreciates, buy it. If it depreciates, lease it.”

P.S. Leasing should just be viewed as another form of financing. I laugh when people say they want to "own, not rent" their vehicle. Whether one finances it or leases it, the legal owner isn't YOU.

Alan Smithee

Big flaw...in your scenario you would miss one of the biggest leasing advantages (in CA at least) by having to personally pay CA sales tax on the entire purchase price.

Alan Smithee

Unless something has changed, PFS does not have that language, so not relevant here...

Sloopy

I did the same and purchased after 2 years. Check with your accountant to see what they are comfortable with.

Pigs get fat, hogs get slaughtered! At the time of purchase the car was worth about 40K more than the buy out so I also saved on sales tax.