GT3 Lease
08-21-2021, 03:14 AM
#16
A few arguments to lease: 2yr, $0 down, 5K mi/yr, esp in CA, for those who get new cars every 12mos anyway and where GT3 (or any car) is likely a DD/consumable.....
One's ability to generate ?15-20%/yr returns on $200K in capital in far better trading vehicles than a depreciating car
Sales taxes...8%ish in CA, immediately lost if buying, vs sales taxes only on lease-financed amt (paid mthly)
Dealer 10%ish spread upon trade-in (unless one ascribes zero opportunity cost to own time/risk to try to sell car on own)
Resale value risks, esp if, for ex., have a stock mkt crash when want to exit
Diminished value risks if car damaged during use, vs a lease-gap insured car one can put back to PFS at end of lease if have sub-totaled damage issues
Capital at risk if car is a lemon, etc
mf OP quotes sounds dealer-padded; suspect mf buy rate is more like 0.002ish
All that said, know several quite wealthy, presumably reasonably smart, traders (who trade own money) in CA who have never bought a car in their lives....have always leased $200K+ cars, on such terms; and no absurd trying to tax-deduct it: asking for a far more costly (in one's time and legal fees) IRS audit
Renting is often much cheaper vs buying, whether girls/houses/cars, etc, esp for those who are skilled in compounding own capital in various trading vehicles....and esp in liquid mkts for such easily rentable & cheap consumables, which tend to exist in deep mkts like LA's Westside for all the obvious reasons....and PFS makes leasing more seamless than solving leasing a Ferr or 765, etc
One's ability to generate ?15-20%/yr returns on $200K in capital in far better trading vehicles than a depreciating car
Sales taxes...8%ish in CA, immediately lost if buying, vs sales taxes only on lease-financed amt (paid mthly)
Dealer 10%ish spread upon trade-in (unless one ascribes zero opportunity cost to own time/risk to try to sell car on own)
Resale value risks, esp if, for ex., have a stock mkt crash when want to exit
Diminished value risks if car damaged during use, vs a lease-gap insured car one can put back to PFS at end of lease if have sub-totaled damage issues
Capital at risk if car is a lemon, etc
mf OP quotes sounds dealer-padded; suspect mf buy rate is more like 0.002ish
All that said, know several quite wealthy, presumably reasonably smart, traders (who trade own money) in CA who have never bought a car in their lives....have always leased $200K+ cars, on such terms; and no absurd trying to tax-deduct it: asking for a far more costly (in one's time and legal fees) IRS audit
Renting is often much cheaper vs buying, whether girls/houses/cars, etc, esp for those who are skilled in compounding own capital in various trading vehicles....and esp in liquid mkts for such easily rentable & cheap consumables, which tend to exist in deep mkts like LA's Westside for all the obvious reasons....and PFS makes leasing more seamless than solving leasing a Ferr or 765, etc
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GT350R (08-21-2021)
08-21-2021, 12:47 PM
#17
A few arguments to lease: 2yr, $0 down, 5K mi/yr, esp in CA, for those who get new cars every 12mos anyway and where GT3 (or any car) is likely a DD/consumable.....
One's ability to generate ?15-20%/yr returns on $200K in capital in far better trading vehicles than a depreciating car
Sales taxes...8%ish in CA, immediately lost if buying, vs sales taxes only on lease-financed amt (paid mthly)
Dealer 10%ish spread upon trade-in (unless one ascribes zero opportunity cost to own time/risk to try to sell car on own)
Resale value risks, esp if, for ex., have a stock mkt crash when want to exit
Diminished value risks if car damaged during use, vs a lease-gap insured car one can put back to PFS at end of lease if have sub-totaled damage issues
Capital at risk if car is a lemon, etc
mf OP quotes sounds dealer-padded; suspect mf buy rate is more like 0.002ish
All that said, know several quite wealthy, presumably reasonably smart, traders (who trade own money) in CA who have never bought a car in their lives....have always leased $200K+ cars, on such terms; and no absurd trying to tax-deduct it: asking for a far more costly (in one's time and legal fees) IRS audit
Renting is often much cheaper vs buying, whether girls/houses/cars, etc, esp for those who are skilled in compounding own capital in various trading vehicles....and esp in liquid mkts for such easily rentable & cheap consumables, which tend to exist in deep mkts like LA's Westside for all the obvious reasons....and PFS makes leasing more seamless than solving leasing a Ferr or 765, etc
One's ability to generate ?15-20%/yr returns on $200K in capital in far better trading vehicles than a depreciating car
Sales taxes...8%ish in CA, immediately lost if buying, vs sales taxes only on lease-financed amt (paid mthly)
Dealer 10%ish spread upon trade-in (unless one ascribes zero opportunity cost to own time/risk to try to sell car on own)
Resale value risks, esp if, for ex., have a stock mkt crash when want to exit
Diminished value risks if car damaged during use, vs a lease-gap insured car one can put back to PFS at end of lease if have sub-totaled damage issues
Capital at risk if car is a lemon, etc
mf OP quotes sounds dealer-padded; suspect mf buy rate is more like 0.002ish
All that said, know several quite wealthy, presumably reasonably smart, traders (who trade own money) in CA who have never bought a car in their lives....have always leased $200K+ cars, on such terms; and no absurd trying to tax-deduct it: asking for a far more costly (in one's time and legal fees) IRS audit
Renting is often much cheaper vs buying, whether girls/houses/cars, etc, esp for those who are skilled in compounding own capital in various trading vehicles....and esp in liquid mkts for such easily rentable & cheap consumables, which tend to exist in deep mkts like LA's Westside for all the obvious reasons....and PFS makes leasing more seamless than solving leasing a Ferr or 765, etc
but porsche writes these leases as if the GT3 loses almost half its value in 3 years and makes your lease payment higher than the cost of just financing it.
The only advantage is if the car is worth less than half its value in 3 years and you want to get rid of it, then the depreciation isn’t your problem. But that has never happened on a GT3 and probably not on most 911’s.
Just buy the car, and if you don’t want to use your cash, find a low rate from a bank—I know USAA is around 2% right now.
08-21-2021, 01:57 PM
#18
Rennlist Member
All of this makes sense assuming the money factor and residual value are in line.
but porsche writes these leases as if the GT3 loses almost half its value in 3 years and makes your lease payment higher than the cost of just financing it.
The only advantage is if the car is worth less than half its value in 3 years and you want to get rid of it, then the depreciation isn’t your problem. But that has never happened on a GT3 and probably not on most 911’s.
Just buy the car, and if you don’t want to use your cash, find a low rate from a bank—I know USAA is around 2% right now.
but porsche writes these leases as if the GT3 loses almost half its value in 3 years and makes your lease payment higher than the cost of just financing it.
The only advantage is if the car is worth less than half its value in 3 years and you want to get rid of it, then the depreciation isn’t your problem. But that has never happened on a GT3 and probably not on most 911’s.
Just buy the car, and if you don’t want to use your cash, find a low rate from a bank—I know USAA is around 2% right now.
08-22-2021, 09:44 AM
#19
Race Director
I also know guys that play the game and have their company pay the lease payments and they buy the car at the end of the lease personally. Gaming the system. I personallly think that is all too much brain damage and just buy the car.[/QUOTE]
Hey- I do this on my DD. But actually better off financing rather than leasing when you go this route in my opinion. They pay the note and after wards I can decide to trade, keep ect ect
Hey- I do this on my DD. But actually better off financing rather than leasing when you go this route in my opinion. They pay the note and after wards I can decide to trade, keep ect ect
08-22-2021, 09:21 PM
#20
Rennlist Member
A few arguments to lease: 2yr, $0 down, 5K mi/yr, esp in CA, for those who get new cars every 12mos anyway and where GT3 (or any car) is likely a DD/consumable.....
One's ability to generate ?15-20%/yr returns on $200K in capital in far better trading vehicles than a depreciating car
Sales taxes...8%ish in CA, immediately lost if buying, vs sales taxes only on lease-financed amt (paid mthly)
Dealer 10%ish spread upon trade-in (unless one ascribes zero opportunity cost to own time/risk to try to sell car on own)
Resale value risks, esp if, for ex., have a stock mkt crash when want to exit
Diminished value risks if car damaged during use, vs a lease-gap insured car one can put back to PFS at end of lease if have sub-totaled damage issues
Capital at risk if car is a lemon, etc
mf OP quotes sounds dealer-padded; suspect mf buy rate is more like 0.002ish
All that said, know several quite wealthy, presumably reasonably smart, traders (who trade own money) in CA who have never bought a car in their lives....have always leased $200K+ cars, on such terms; and no absurd trying to tax-deduct it: asking for a far more costly (in one's time and legal fees) IRS audit
Renting is often much cheaper vs buying, whether girls/houses/cars, etc, esp for those who are skilled in compounding own capital in various trading vehicles....and esp in liquid mkts for such easily rentable & cheap consumables, which tend to exist in deep mkts like LA's Westside for all the obvious reasons....and PFS makes leasing more seamless than solving leasing a Ferr or 765, etc
One's ability to generate ?15-20%/yr returns on $200K in capital in far better trading vehicles than a depreciating car
Sales taxes...8%ish in CA, immediately lost if buying, vs sales taxes only on lease-financed amt (paid mthly)
Dealer 10%ish spread upon trade-in (unless one ascribes zero opportunity cost to own time/risk to try to sell car on own)
Resale value risks, esp if, for ex., have a stock mkt crash when want to exit
Diminished value risks if car damaged during use, vs a lease-gap insured car one can put back to PFS at end of lease if have sub-totaled damage issues
Capital at risk if car is a lemon, etc
mf OP quotes sounds dealer-padded; suspect mf buy rate is more like 0.002ish
All that said, know several quite wealthy, presumably reasonably smart, traders (who trade own money) in CA who have never bought a car in their lives....have always leased $200K+ cars, on such terms; and no absurd trying to tax-deduct it: asking for a far more costly (in one's time and legal fees) IRS audit
Renting is often much cheaper vs buying, whether girls/houses/cars, etc, esp for those who are skilled in compounding own capital in various trading vehicles....and esp in liquid mkts for such easily rentable & cheap consumables, which tend to exist in deep mkts like LA's Westside for all the obvious reasons....and PFS makes leasing more seamless than solving leasing a Ferr or 765, etc
Yes you have to be liquid - or pay a note - and there is an opportunity cost, but if you want to actually "own" the car then you will get there sooner or later, and US markets are super high. It isn't easy to sell a leased car to a 3rd party either - you have to buy it out, get hit with a huge payoff of principal for the rest of the term, and then sales tax (at least in the state of CA).
2.2% vs 7-8% APR * on top of * crappy Porsche residuals is a HUGE difference in the monthly payment, and will generally more than equal the sales tax costs over 3 years (even with 9.5% tax in my hood). Plus, add in anything over residual max at full boat - meaning you lose the advantage of "only paying for the 50% of the car you use" on those options. (I am 10K over in speccing a decently equipped Cayenne Hybrid, which is $300 per month plus tax).
Our strategy - CFA reviewed - is buy it with cheap financing, leave your cash in the market, and build equity with each payment vs a terrible lease offer.
Last edited by Chris C.; 08-22-2021 at 09:24 PM.
08-23-2021, 12:32 AM
#21
Rennlist Member
Our strategy - CFA reviewed - is buy it with cheap financing, leave your cash in the market, and build equity with each payment vs a terrible lease offer.[/QUOTE]
This was my motto as a real estate person back in the 2000s too. Worked very well until the bottom dropped out of everything in 2008. One big lesson I learned was the stuff I had paid for wasn't a concern, but all those payments were death when my income sources dried up. Told myself then that paying cash was worth at least an additional 5% APR on the piece of mind side. If I do car debt now, it would be very short term while I'm getting cash out of something. Stock market is not going to continue to make these kinds of returns forever.
This was my motto as a real estate person back in the 2000s too. Worked very well until the bottom dropped out of everything in 2008. One big lesson I learned was the stuff I had paid for wasn't a concern, but all those payments were death when my income sources dried up. Told myself then that paying cash was worth at least an additional 5% APR on the piece of mind side. If I do car debt now, it would be very short term while I'm getting cash out of something. Stock market is not going to continue to make these kinds of returns forever.
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08-23-2021, 06:58 PM
#22
Racer
What made you think Porsche would have an aggressive lease on a car that will be effectively sold out immediate for the entire production run?
08-24-2021, 01:11 PM
#24
Rennlist Member
08-24-2021, 01:13 PM
#25
Rennlist Member
Yes, said another way - don't spend money on a car you really can't afford - lol. Financing decision is a separate one from the purchase decision.
Last edited by Chris C.; 08-24-2021 at 01:15 PM.