Lease Question regarding "Rent Charge"
12-09-2018, 02:18 AM
#1
Lease Question regarding "Rent Charge"
Hi,
I heard that you have "Option to Purchase" your leased Porsche and do not need to go to the end of the contract.
The part that I want to understand is the "Rent Charge" area of the payment and how it get calculated at the end.
Imagine my "Adjusted Capitalized Cost" is $100k and and the rent charge is $30k for entire lease terms and I am paying $2K per month before tax.
1) If I want to buyout the car after 8 months and I already paid $16k what will be my buyout cost? will it be less than $100k but more than $84k because portion of my payments went toward "Rent Charge" or it will be still $100K because all of your payment will go toward "Rent Charge" until it goes to zero?
2) Is the "Rent Charge" equally distributed between every months or it is higher at the beginning and goes down? Is there a way to calculate or estimate how much of your each payment will go toward rent charge?
3) Is there any rule about how soon you can exercise your "Option to Purchase" with Porsche finance?
Regards,
I heard that you have "Option to Purchase" your leased Porsche and do not need to go to the end of the contract.
The part that I want to understand is the "Rent Charge" area of the payment and how it get calculated at the end.
Imagine my "Adjusted Capitalized Cost" is $100k and and the rent charge is $30k for entire lease terms and I am paying $2K per month before tax.
1) If I want to buyout the car after 8 months and I already paid $16k what will be my buyout cost? will it be less than $100k but more than $84k because portion of my payments went toward "Rent Charge" or it will be still $100K because all of your payment will go toward "Rent Charge" until it goes to zero?
2) Is the "Rent Charge" equally distributed between every months or it is higher at the beginning and goes down? Is there a way to calculate or estimate how much of your each payment will go toward rent charge?
3) Is there any rule about how soon you can exercise your "Option to Purchase" with Porsche finance?
Regards,
12-09-2018, 09:37 AM
#2
Hi,
I heard that you have "Option to Purchase" your leased Porsche and do not need to go to the end of the contract.
The part that I want to understand is the "Rent Charge" area of the payment and how it get calculated at the end.
Imagine my "Adjusted Capitalized Cost" is $100k and and the rent charge is $30k for entire lease terms and I am paying $2K per month before tax.
1) If I want to buyout the car after 8 months and I already paid $16k what will be my buyout cost? will it be less than $100k but more than $84k because portion of my payments went toward "Rent Charge" or it will be still $100K because all of your payment will go toward "Rent Charge" until it goes to zero?
2) Is the "Rent Charge" equally distributed between every months or it is higher at the beginning and goes down? Is there a way to calculate or estimate how much of your each payment will go toward rent charge?
3) Is there any rule about how soon you can exercise your "Option to Purchase" with Porsche finance?
Regards,
I heard that you have "Option to Purchase" your leased Porsche and do not need to go to the end of the contract.
The part that I want to understand is the "Rent Charge" area of the payment and how it get calculated at the end.
Imagine my "Adjusted Capitalized Cost" is $100k and and the rent charge is $30k for entire lease terms and I am paying $2K per month before tax.
1) If I want to buyout the car after 8 months and I already paid $16k what will be my buyout cost? will it be less than $100k but more than $84k because portion of my payments went toward "Rent Charge" or it will be still $100K because all of your payment will go toward "Rent Charge" until it goes to zero?
2) Is the "Rent Charge" equally distributed between every months or it is higher at the beginning and goes down? Is there a way to calculate or estimate how much of your each payment will go toward rent charge?
3) Is there any rule about how soon you can exercise your "Option to Purchase" with Porsche finance?
Regards,
12-09-2018, 09:51 AM
#3
Rennlist Member
In the eyes of the lender, a lease and a loan are very similar. You can call Porsche Financial at any time and ask your payoff amount. There should be no issue with paying it off at any time if that's what you choose to do.
12-09-2018, 10:37 AM
#4
Not sure how Porsche financial works but some unscrupulous banks will charge the market rate of the car if trying to purchase before the lease is up.
Every payment should theoretically be weighted the same
Every payment should theoretically be weighted the same
12-09-2018, 10:41 AM
#5
Rennlist Member
I checked on the lease for fun a few months ago. Quite frankly, Porsche's lease percentages were horrible. Money factor was something like 9% interest. I was trying to work out a clever deal where my company leases the car for my daily driver (haha) and then I would buy it at the end of the lease. It was going to cost me almost $30k more than just paying cash. I decided it wasn't worth it, but might be to someone. My dealer would have been happy to make that deal. 
12-09-2018, 11:31 AM
#7
Rennlist Member
Every lease payment is made up of depreciation, rent, and tax. Depreciation is the fixed monthly principal reduction, which is the capitalized cost minus the residual value, divided by number of payments. Rent is the fixed monthly finance cost based on the money factor, so basically your interest payment. Tax is your sales tax (if applicable in your state).
Just so its clear, all three values are fixed for every payment. You make the same depreciation, rent, and tax payment every month. It's not like a conventional loan.
Just so its clear, all three values are fixed for every payment. You make the same depreciation, rent, and tax payment every month. It's not like a conventional loan.
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12-09-2018, 02:20 PM
#8
Rennlist Member
there is no rule as when to buy your lease
I leased a boxter S three years ago from PFS and sold the car 4 months later to the dealer
basically the dealer paid off the car for me and I paid them the difference between the actual value of the car and the payoff amount
I leased a boxter S three years ago from PFS and sold the car 4 months later to the dealer
basically the dealer paid off the car for me and I paid them the difference between the actual value of the car and the payoff amount
12-09-2018, 03:47 PM
#9
Every lease payment is made up of depreciation, rent, and tax. Depreciation is the fixed monthly principal reduction, which is the capitalized cost minus the residual value, divided by number of payments. Rent is the fixed monthly finance cost based on the money factor, so basically your interest payment. Tax is your sales tax (if applicable in your state).
Just so its clear, all three values are fixed for every payment. You make the same depreciation, rent, and tax payment every month. It's not like a conventional loan.
Just so its clear, all three values are fixed for every payment. You make the same depreciation, rent, and tax payment every month. It's not like a conventional loan.
That was my understanding too, but then I found this segment of lease contract regarding buyout:
“ Minus unearned Rent Charges calculated according to the actuarial method ... inder this method a Base Monthly Payment is applied first to accumulated Rent Charge and any reminder is subtracted from, or any deficiency is added to, the adjusted Capitalized Cost. Rent charges are earned on a set of monthly schedule regardless of when a Monthly Payment or Single Payment is received. Rent charges are at their maximum at the beginning of the lease term and decrease to thier minimum at the end of the lease term”
My understanding from above is that the Rent Charge portion is not the same every month (last sentence) and it is possible that it will be even more than all the monthly payment that your paying early one (the part that mentions any deficiency will be added the adjusted cost.
what am I missing here?