Price Negotiations
#31
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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.
#32
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I've never leased so don't know the details well but have done a financial calc which always seems to be significantly more costly. You do get to drive a newer car but take 2 huge drive off lot depreciations. I looked at a lease over 8 year period with assumptions about salvage value and opportunity costs. (i.e. two 4 year leases vs buy car hold 8 yrs)
#33
Instructor
#34
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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 ... : )
#35
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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.
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.
#36
Burning Brakes
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Such a healthy affliction
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At which point John Maynard walks up and reminds that in the long run.....
#38
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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.
#39
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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.
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.
#40
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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
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
#41
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Originally Posted by mdkrp:10407708
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
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
#42
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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).
#43
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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).
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#44
Racer
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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.
#45
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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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