For CA, lease is way better if you plan to sell the car within a couple years. 9.75% tax up front is no joke on $150K+.

 

Is the tax not built into the lease? I thought it was (but never leased anything)...

 

Yea, you're taxed every lease payment versus having to come up with the $15k+ upfront.

That said, if you're financing it, you're still paying off the tax over time.

Either way

 

The tax is based on monthly payment--the total depreciation plus interest for lease period--not the entire car. So basically, it is pay as you go whereas financing all the tax is built into the total amount of the loan.

For those CA peeps with short car attention spans, even relatively expensive leases on high demand cars is most of the time the better way to go. Less cash tied up for the experience.

 

be careful with one pay lease ...
i am not sure about details with pfs , but with MB , they still charge you an outrageous interest rate for you paying them every thing upfront, around 4 % vs normally 6% Also if you total the car, you are responsible for the difference between what the insurance company say that the car is worth and what you owe on the car.

 

MF is discounted for one pays but you are still borrowing everything beyond the depreciation portion of lease (remaining residual amount) so yes interest still applies. Also most lease companies include GAP policy but if MBF does not include GAP policy you can buy separate policy yourself through number of different sources and it's not much.

 

Thank you all for your responses. After reading your comments I agree that the lease is not the way to go for a GT car and since I can afford it I'll opt to buy it outright and save on the interest. Many, many thanks!

 

i buy my cars

basic principles:
- don't use leverage in acquiring an asset that is likely to depreciate
- leasing is borrowing money - interest rates may be zero... but lease rates are not
- usual argument for leasing/borrowing is the ability to use the money borrowed/not spent can be used to earn investment returns... to that i say if that is the case you shouldn't be spending 150k on a car

 

Thanks, although it has nothing to do with the question I buy mine too.

 

there is a way to actually gain by leasing.
1- the vehicle has to retain its value (very difficult to predict) Gt cars seem to loose less
2- lease through your business and get the tax benefits
3- set high payments and low residual value at a set price at the end of the lease
4- buy out the vehicle privately at the end of lease at the lower set price
5- the net result is a gain, if and only if, the value of the vehicle stays high

This may not work in all areas dependant on taxes etc. In Canada it can work

 

Sorry to take this thread in a different direction, but would you be willing to explain how this arrangement would work in Canada? If it can actually be done I might have to fire my accountant. Back story: when I tried to lease my current 4 series on the business my accountant strongly advised against it as the maximum CRA would allow is $800 per month and he said writing off a $65,000 BMW lease is a huge no no & red flag. I've been leasing the car personally for the past 2 years and can't even imagine the look on his face if I tried this with a six figure Porsche.

Whenever I read about these arrangements I always assumed it was our lucky friends south of the border and have been very envious! This is the first I've heard specific mention of it in Canada.

If I can swing this with a Porsche you just made my year

 

Just make sure you are allowed to sell your leased vehicle to a private party or dealer if you want to get out early. I've heard some banks have restrictions when it comes to selling cars before the lease expires.

 

I'm pretty sure your account is correct. There are special cases for vehicles considered non passenger like trucks and vans that can be treated differently.

Also, if your business sells you a car at less than FMV then that would be a taxable benefit which should be declared.

 

yes and about 50 other things one must review before choosing private party lease company. While a couple good ones exist I find majority of private lease companies have many terms and conditions on contract that needs careful thought and consideration to make sure it is right for person/company that is going leasing route.

 

Sorry for posting but thankful för help. Does anyone know the interest for going porsche finance on a gt3? Does it matter which model it is? Different rate in all countries? I live in sweden.