Lease companies
#16
Rennlist Member
What is the current thinking on lease -vs- buy for those that don’t own a business? As mentioned earlier in this thread, CA sales tax is significant. “Pride of ownership” aside, leasing avoids the tax payment plus the appeal of turning the car in after 3 years for a new one. Opinions?
DaveGee
DaveGee
#17
The short answer is that in California there is a lot of benefit to leasing if you sell your cars within 5 years. You stated the obvious sales tax benefit and you can add in the opportunity cost of capital. I know there are a lot of people on here that want to pay cash and that works for them, but leasing is not some demented scheme to steal money from customers. If you do the math on purchase vs lease the cost is almost identical after 3 years not counting the sales tax benefit. Porsche is also very aggressive with their pull ahead programs so there is usually an option to purchase a new car 6 to 12 months before the end of your lease.
The other added benefit is a known exit price at the end of the lease as well as flexibility of the exit with PFS pull ahead programs. I know the agreed upon price for my vehicle at the end of 3 years, if it is worth more then I sell it myself and pocket the difference, worth less and I hand over the keys. The days of early exit penalties are long gone unless you are doing some super low credit score B-F type of financing. There is a set depreciation schedule for the vehicle and you can buy it at any point in the curve.
Last part to this is value after an accident. We got our daughter a 428 Cab for her 16th birthday and 3/4's of the panels on the car were replaced due to accidents (none her fault). Just did a 5 month pull ahead with BMWFS and handed the keys back over to them with no questions asked and yes they knew about the damage. Good luck selling that car on the used market.
The other added benefit is a known exit price at the end of the lease as well as flexibility of the exit with PFS pull ahead programs. I know the agreed upon price for my vehicle at the end of 3 years, if it is worth more then I sell it myself and pocket the difference, worth less and I hand over the keys. The days of early exit penalties are long gone unless you are doing some super low credit score B-F type of financing. There is a set depreciation schedule for the vehicle and you can buy it at any point in the curve.
Last part to this is value after an accident. We got our daughter a 428 Cab for her 16th birthday and 3/4's of the panels on the car were replaced due to accidents (none her fault). Just did a 5 month pull ahead with BMWFS and handed the keys back over to them with no questions asked and yes they knew about the damage. Good luck selling that car on the used market.
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erikcw (07-10-2019)
#21
Rennlist Member