We must be really stupid
Race Director
Joined: Nov 2014
Posts: 13,799
Likes: 208
From: FL
Selling price - residual = the depreciation anyone would experience. The buyer (if purchasing) or lessor if leasing.
Where do they make their "profit"? The Money Factor/Interest Rate. The money factor is an interest rate. The cost of the lease to a lessee. In other words, the "rental fee".
Am I wrong??
Where do they make their "profit"? The Money Factor/Interest Rate. The money factor is an interest rate. The cost of the lease to a lessee. In other words, the "rental fee".
Am I wrong??
Three Wheelin'
Joined: Sep 2006
Posts: 1,685
Likes: 1,329
From: Canyon Road Nirvana, CA
If memory serves the monthly finance charge part of the payment is equal to the translated interest rate (money factor x 2400) on the residual plus 1/2 of the depreciation.
For example, if the car cost $100,000 and the residual is $60,000 and the money factor is .002, your monthly finance charge would be $320. ($100,000 + $60,000 x .002 = $320).
.002 x 2400 translates to a 4.8% interest rate so if you add the residual to 1/2 the depreciation ($80,000) and multilpy by 4.8 that will give you an annual finance charge of $3840 or monthly finance charge of $320.
For example, if the car cost $100,000 and the residual is $60,000 and the money factor is .002, your monthly finance charge would be $320. ($100,000 + $60,000 x .002 = $320).
.002 x 2400 translates to a 4.8% interest rate so if you add the residual to 1/2 the depreciation ($80,000) and multilpy by 4.8 that will give you an annual finance charge of $3840 or monthly finance charge of $320.
Race Director
Joined: Nov 2014
Posts: 13,799
Likes: 208
From: FL
Must say, cross shopping some other brands for an SUV, etc. Porsche does really stand out compared to the competition. Just the feel, fit, quality of the finishes, etc. are top notch. You get what you pay for. In many cases, more expensive vehicles don't even measure up to Porsche.
Burning Brakes
Joined: May 2015
Posts: 815
Likes: 7
From: American Southwest
Porsche does really stand out compared to the competition. Just the feel, fit, quality of the finishes, etc. are top notch. You get what you pay for. In many cases, more expensive vehicles don't even measure up to Porsche.
Race Director
Joined: May 2015
Posts: 13,163
Likes: 3,919
Must say, cross shopping some other brands for an SUV, etc. Porsche does really stand out compared to the competition. Just the feel, fit, quality of the finishes, etc. are top notch. You get what you pay for. In many cases, more expensive vehicles don't even measure up to Porsche.
Burning Brakes
Joined: May 2015
Posts: 815
Likes: 7
From: American Southwest
Such was not always the case, as many of us know. Materials in the 964 were...utilitarian.
The 928 was pretty luxurious for the time. Porsche played 'catch up' through the 996 and beyond, and without the various upgrades, materials in the 996 were a bit ticky-tacky. By the time the 997 hit, it was reaching a higher quality in their interior design and materials.
...Whereupon they were accused of building just another luxo-coupe, and caving to the well heeled but automotively uneducated status buyer.
Lesson: Damned if you do, damned if you don't.
The 928 was pretty luxurious for the time. Porsche played 'catch up' through the 996 and beyond, and without the various upgrades, materials in the 996 were a bit ticky-tacky. By the time the 997 hit, it was reaching a higher quality in their interior design and materials.
...Whereupon they were accused of building just another luxo-coupe, and caving to the well heeled but automotively uneducated status buyer.
Lesson: Damned if you do, damned if you don't.
Drifting
Joined: Feb 2011
Posts: 3,464
Likes: 311
From: Midtown Atlanta
Yeah, it's a fascinating tale, there are many more details that of course didn't get published. Also, he just did it again in 30 hours (still beating Alex Roy) in a Benz he bought for $1500.
And for the record, all attempts to connect me to any of these immoral, illegal, and socially irredeemable shenanigans have been totally and completely discredited.
And for the record, all attempts to connect me to any of these immoral, illegal, and socially irredeemable shenanigans have been totally and completely discredited.
Drifting
Joined: Feb 2011
Posts: 3,464
Likes: 311
From: Midtown Atlanta
I live in Manhattan. Use the macan mostly. GTS and Rs usually weekends only. I live on the upper east side and it's not so bad. Messed up thing is I work on Long Island so I do the reverse commute. So I get to drive everyday. I love Manhattan but would prefer to live on the island. My wife, not so much. She likes the city more. So here we are. Life is full of trade offs. My kids are getting older and the move out to a house I'm hoping comes sooner than later.
Racer
Joined: Mar 2015
Posts: 354
Likes: 0
Wow yes it did. For the record, I just thought it sounded stupid to live in a place where the potholes are so big they charge their own tolls per the OP... I've never lived in NYC. Maybe the pothole tolls aren't very expensive and not a big deal. How am I supposed to know that? I'm definitely not a trust fund baby though we were dirt poor when I grew up. I got through college with loans, not parental support. Honestly though, totally personal preference, I'd take the mountains of Washington where I grew up and the redwoods of California where I live now over the buildings and fancier culture of NYC any day. I totally understand how many other poeple would take the opposite stance, it's just not for me.
Burning Brakes
Joined: Oct 2014
Posts: 1,195
Likes: 8
If memory serves the monthly finance charge part of the payment is equal to the translated interest rate (money factor x 2400) on the residual plus 1/2 of the depreciation.
For example, if the car cost $100,000 and the residual is $60,000 and the money factor is .002, your monthly finance charge would be $320. ($100,000 + $60,000 x .002 = $320).
.002 x 2400 translates to a 4.8% interest rate so if you add the residual to 1/2 the depreciation ($80,000) and multilpy by 4.8 that will give you an annual finance charge of $3840 or monthly finance charge of $320.
For example, if the car cost $100,000 and the residual is $60,000 and the money factor is .002, your monthly finance charge would be $320. ($100,000 + $60,000 x .002 = $320).
.002 x 2400 translates to a 4.8% interest rate so if you add the residual to 1/2 the depreciation ($80,000) and multilpy by 4.8 that will give you an annual finance charge of $3840 or monthly finance charge of $320.
Racer
Joined: Oct 2015
Posts: 282
Likes: 63
From: Chicago
I think it's a little more complicated than that. If I remember my math from about a millennium ago, amortization schedules follow a natural logarithmic function. You would expect to have a higher finance charge at the beginning of a loan payback, because the interest applied to the outstanding balance will yield a higher amount. Then again, maybe leases work differently.
Instructor
Joined: Mar 2016
Posts: 101
Likes: 0
I think it's a little more complicated than that. If I remember my math from about a millennium ago, amortization schedules follow a natural logarithmic function. You would expect to have a higher finance charge at the beginning of a loan payback, because the interest applied to the outstanding balance will yield a higher amount. Then again, maybe leases work differently.
on a lease is a bit different, there is no advantage to paying a lease off early like a loan would be. the "interest charge" that we convert from money factor is not really interest. It's a rental fee.
Basically, the bank is buying the car and renting it out to you in a lease, giving you the option of buying it out. In a bunch of cases, in order to get out of the lease, you need to make the remaining payments on the lease, which is why it's hard to do so. If you want to buy out the car before the lease term ends, same thing, pay remaining payments + residual (+ sales tax in applicable cases).
The mf * 2400 is just saying it's equivilent to a x% interest rate loan, but it's not interest since you are not buying a car, you're renting so amortization doesn't apply.
Race Director
Joined: Nov 2014
Posts: 13,799
Likes: 208
From: FL
Originally Posted by Stil_1
on a lease is a bit different, there is no advantage to paying a lease off early like a loan would be. the "interest charge" that we convert from money factor is not really interest. It's a rental fee.
Basically, the bank is buying the car and renting it out to you in a lease, giving you the option of buying it out. In a bunch of cases, in order to get out of the lease, you need to make the remaining payments on the lease, which is why it's hard to do so. If you want to buy out the car before the lease term ends, same thing, pay remaining payments + residual (+ sales tax in applicable cases).
The mf * 2400 is just saying it's equivilent to a x% interest rate loan, but it's not interest since you are not buying a car, you're renting so amortization doesn't apply.
Basically, the bank is buying the car and renting it out to you in a lease, giving you the option of buying it out. In a bunch of cases, in order to get out of the lease, you need to make the remaining payments on the lease, which is why it's hard to do so. If you want to buy out the car before the lease term ends, same thing, pay remaining payments + residual (+ sales tax in applicable cases).
The mf * 2400 is just saying it's equivilent to a x% interest rate loan, but it's not interest since you are not buying a car, you're renting so amortization doesn't apply.
Pro
Joined: Oct 2015
Posts: 529
Likes: 2
Its fine to have a Car in NYC, for trips out of the city. Of course I'm writing this half-heartedly. There would have to be special circumstances to live and drive to work in the 5 Burroughs.