carcommander

Unless you can get a rate of return greater than the internal rate of return in the lease it makes more sense to pay cash than lease. If you have to finance it then a lease may be cheaper.

Carrera GT

That's an imbalanced comparison -- you'd have to make the duration the same. The lease wins by a country mile if you consider cost of opportunity since you'd retain 80%+ of the capital at the outset. Given interest rates are at all time lows in the USA, borrowing money at say 6% today is going to be a significant advantage compared to the same cost of borrowing in say three or four years as the lease tails out.

skinzy

Agree with this and I do assume all cash deal.

Carrera GT

Indeed you'd be comparing taxed expense cash out versus pre-tax earning potential -- that becomes case specific. I think it's reasonable to use the assumption that cash in an investment portfolio over a five year compound return cannot be "guaranteed" to generate taxed returns exceeding the interest burden on the lease.

Aside from a house or a business acquisition, financing is madness and will invariably be the most expensive way to fly -- like smoking cigarettes ... just don't do it.

The lease creates the opportunity to have the liquidity to use that capital to other purposes and any earned interest defrays the net cost of the interest cost of the lease. At this point, I think accounting disappears into its own spreadsheet of approximate models. In practice, the $100K Porsche buyer has to look in the mirror and see if the person staring back has absolute, unchanging answers on keeping the car for 4+ years without doubt. The person in the mirror when I look, has been certain he was keeping the car ... five times in the last five years ... : )

tgcrun

Leasing is just an alternative method of financing. You are essentially borrowing money to acquire the car, and instead of paying principal and interest on the entire purchase price you're paying principal and interest on the difference between the purchase price and the residual value and paying interest only on the residual value. That's what makes the payments lower.

Obviously paying cash is the cheapest way to acquire a car, but as stated above, if the return you can get on your cash is higher than the cost of financing, then finance the car and invest your cash elsewhere. If you decide to finance, leasing gives you two big advantages. First, if you use your car for business, you get a far greater tax deduction on a high end car if you lease it rather than purchase it. Second, you have a guaranteed residual at the end of the lease. If your car is worth more than the residual, you can purchase it and either keep it or sell it at a profit. If your car is worth less than the residual, you can just give it back.

Bill_C4S

But the value of the grin that greeted your visage was...priceless?

Such a healthy affliction

At which point John Maynard walks up and reminds that in the long run.....

chailinchou

In my case, I plan to keep the car for 5 years. Should I lease or buy?

carsrmyvice

You are in the middle ground where buying is clearly the right choice, but it will not save you as much as if you kept it for say 7-8 years. This of course will be greatly effected by the mileage and condition of the car in 5 years (cpo material ? ). Also you have to put a value on having two new porsches in 5 years, which is what leasing would do for you. As well as taking out the risk of material loss of value due to accidents etc which would lower the resale.

hockeyguy

In my case, I've decided to lease this time. I'm very unusual that I put 20-25K miles a year on my Porsche. In the past, I've bought and traded in my car after 2 years and near 50K miles and have taken a HUGE hit (especially thr last one, in which I had an accident).
So this time I've leased. Since Porsche only charges a ridiculously low extra 30 cents per mile for the extra milage, I will gladly pay the $6-7K penalty at the end of 2 years when I turn in my car with 45-50K miles.

mdkrp

Great info so far!
Does anyone know if Porsche is still running the 3 month lease buyout of current non-Porsche car payments in April or May? They were running it in March and I can not find info on the Edmunds section for deals/incentives anymore.
thanks

adamsclubs

April yes, May? Don't know yet.

egraff

My dealer told me that the conquest program is on through the end of June. Just to be clear, Porsche doesn't buy out or pay off your lease. They'll give you a purchase price 'rebate' equal to up to 3 payments on a current competitive lease (max of $1,500 per payment, and aggregate cap of $4,500).

windboat

How is this factored into the new monthly lease cost. MB Credit had a similar program, but they did not really forgive the former leases, they just added it into new lease and amortized it over the period of new lease. If they do it like MB, it is quite easy to get upside down if you flip your lease a couple of times. Personally I hate auto leases and started only buying cars about 10 years ago.

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ds2k1

I just got my 991S Cab last week. The dealer paid 3 months' worth of lease payments and used as to reduce the capitalized cost, equaling lower monthly payments. This was on top of the 6% discount already negotiated.

carsrmyvice

Porsche will write you a check for three times your payment. Sounds like you are referring to just rolling the cost into the next lease. That is no deal at all. Unless the rates have gone down you would save nothing in that scenario.