Lease or buy and hold?
07-24-2015, 01:41 PM
#61
07-24-2015, 11:52 PM
#62
In my view it all depends in what life stage you are in. I think that when people reach that 50 mark they tend to look at things from a fixed income view point. They tend to pay cash for things in order to keep within there future expenditure budget. Younger people tend to lease because working capitol is hard to come by and is better use to purchase other assets like housing. I could only imagine that most people that buy new Porsches are making at least $200k a year income.
According to PCNA research:
• 86% of Porsche 911 owners are male
• Porsche 911 owners are primarily 36 to 55 years old
• The average age of a Porsche 911 owner is 46 years
• Porsche owners have an annual gross income of $384,210
• Business – Senior Executive, Business Owners, Health Care Professional
07-25-2015, 12:10 AM
#63
When crunching numbers you have to calculate loss of use of the money you use for a cash purchase. In California you also pay nearly 10% in sales tax of the entire purchase price when you buy but only on the cap reduction and first payment when you lease. I'm basically cheap so I crunch numbers every time I get a new car and leasing usually pencils out to cost less. I like paying less.
The vagaries of the stock market aside, I've found that it's best to buy a 911, retain ownership for at least six years, and then sell it privately.
07-27-2015, 06:34 PM
#64
Rennlist Member
07-27-2015, 10:43 PM
#66
No, you certainly can't. There are maximums that you can deduct that are well below the lease payment on a 991. And even then, you have to document the actual mileage related to business use unless you're comfortable lying on your tax returns.
07-27-2015, 10:52 PM
#68
You can also depreciate the Porsche on your tax return if you purchase it, but you can't get carried away with the percentage of the mileage used for business purposes.
07-28-2015, 12:06 AM
#69
Again, the limitation is ridiculously low relative to the cost of a high dollar car, even before you start reducing it further for the percentage of personal use.
07-28-2015, 11:29 AM
#70
Rennlist Member
What is this "save" concept that you people speak of?
07-28-2015, 10:07 PM
#71
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http://www.businessinsider.com/tax-l...y-cars-2012-11
07-29-2015, 04:14 PM
#72
Well put--
Actually I believe the correct (and misquoted) advice would be to never FINANCE a depreciating asset. When you lease something, you are essentially only paying for the depreciation anyway, along with a small profit for the finance company. So all this talk about depreciation is moot. 20+ years ago it was possible to lease a car through your business and basically buy it back at the end as an individual. The leases were inflated to cover much more than just the depreciation and therefore the buyout was ridiculously low. It was a great way to transfer wealth out of your business tax free and end up owning a personal vehicle with almost no cost basis.
Now leases don't work that way, and whether you buy a car and enjoy it for a few years or lease it and turn it back in, one way or the other the 'cost' of ownership is the depreciation. Of course there are other factors such as sales tax and business write-offs, but in many ways the two different methods are a matter of preference and financial standing. If you want to walk into the dealership and just toss them your keys at the end of a lease then that's your prerogative. For me personally, by 'owning' my car I have the flexibility to get out of it at any time, either by selling or trading it in as circumstance dictates.
If you want to give someone sound financial advice you should tell them to only buy a Porsche (or anything for that matter) at the bottom of it's depreciation curve. That is the smart financial move. Otherwise, since we all want to enjoy our cars well before they reach that low point we've all decided we can live with 'losing' money during our ownership. I choose to see the depreciation as the cost I pay for the pleasure I derive from the car. In the end, if you subtract what you get when you sell the car from what you paid and divide by the miles you used the car, you'll have a number that you can then evaluate as worth it or not.
Now leases don't work that way, and whether you buy a car and enjoy it for a few years or lease it and turn it back in, one way or the other the 'cost' of ownership is the depreciation. Of course there are other factors such as sales tax and business write-offs, but in many ways the two different methods are a matter of preference and financial standing. If you want to walk into the dealership and just toss them your keys at the end of a lease then that's your prerogative. For me personally, by 'owning' my car I have the flexibility to get out of it at any time, either by selling or trading it in as circumstance dictates.
If you want to give someone sound financial advice you should tell them to only buy a Porsche (or anything for that matter) at the bottom of it's depreciation curve. That is the smart financial move. Otherwise, since we all want to enjoy our cars well before they reach that low point we've all decided we can live with 'losing' money during our ownership. I choose to see the depreciation as the cost I pay for the pleasure I derive from the car. In the end, if you subtract what you get when you sell the car from what you paid and divide by the miles you used the car, you'll have a number that you can then evaluate as worth it or not.