992 LEASING QUESTION
10-28-2021, 08:39 PM
#16
Rennlist Member
Wrong - NEVER put money down in advance on a lease. Negates the whole point of leasing. You can make the payment be anything you want by putting money down up front. To successfully negotiate a lease you want the lowest possible money factor (multiply it by 24 to get effective loan % rate), the highest possible residual percentage, and negotiate the lowest possible price for the car. Going in with the attitude of "this is what I will pay per month" will almost certainly guarantee that you'll get screwed on the deal. People should never lease unless they understand the process.
10-28-2021, 09:08 PM
#17
Pro
It's OK but I'm not sure in today's environment if I'd get any vehicle with a 4.8% loan. That's not the issue - the $20K down payment is. Another leasing issue I think most don't consider - you are signing a contract. Sure - you get a loan you're contractually bound but if you have "buyer's remorse" 6 months in you can sell the car (and hopefully not be upside down on the transaction). With a lease if you change your mind before the term is up you instantly have a balloon payment due. As stated previously - if you don't understand a lease it's best to stay out of that transaction.
10-28-2021, 09:14 PM
#18
Drifting
It's OK but I'm not sure in today's environment if I'd get any vehicle with a 4.8% loan. That's not the issue - the $20K down payment is. Another leasing issue I think most don't consider - you are signing a contract. Sure - you get a loan you're contractually bound but if you have "buyer's remorse" 6 months in you can sell the car (and hopefully not be upside down on the transaction). With a lease if you change your mind before the term is up you instantly have a balloon payment due. As stated previously - if you don't understand a lease it's best to stay out of that transaction.
10-28-2021, 09:21 PM
#19
Rennlist Member
A lease is more or less a balloon note. i.e at the end of the term you have a residual (a balloon payment). However in a lease you can exercise the option to turn it in or to pay the balloon payment.
10-28-2021, 09:44 PM
#20
Porsche leases offer terrible terms. You can easily get 1/3 to 1/2 the interest rate with minimal down payment from a bank or credit union. If you live in a high tax jurisdiction and won’t keep the car long, you’ll need to do some math to determine if the tax deferral on the lease is more valuable despite the high interest rate. If you’ll lease through a small business … ymmv. For personal financing, Porsche leases are generally terrible. as others have noted, other manufacturers subsidize their leases with better terms to move inventory. Porsche doesn’t care if you buy the car or not. The line of next guys is long.
10-28-2021, 09:58 PM
#21
Pro
Your comment - "I can buy it out". That's your balloon. That's the remaining lease payments AND the residual amount - often times more than what the car is worth.
10-28-2021, 10:54 PM
#22
RL Community Team
Rennlist Member
Rennlist Member
There are so many posts and threads on this, because people who have leased other luxury cars, Mercedes, Maserati, Alfa Romeo, Aston Martin, Audi, BMW, etc, assume that leasing a 911 is a similar affair. Let’s be clear, it is not the same experience — unlike those other automakers, Porsche does nothing to subsidize 911 leases.
Search the threads. Unless you live in Canada and trying to dodge insane luxury car taxes, it makes zero sense to lease a 911.
Now, in response to my post, like clockwork, there will be someone trying to justify the stupid high money factor that they’re paying on their 911 by stating that they don’t have to worry about diminished value in an accident. Of course, they will fail to understand that between the money factor that they’re paying, and the set residual value, already build in that potential car accident that they may or may not have.
Someone will also chime in “a lease is really just a different type of loan”. OK, sure, a loan with a terrible interest rate and additional tax obligations in some states. You will not come out ahead on a 911 lease.
This will be followed by someone that says that they only pay cash. Then, another, that uses a Credit Union with such a low interest rate that the money is practically free. Let’s not forget the folks who pop a text to their private banker and pay less than 1% on a loan due to their considerable portfolio. There are options not available to everyone.
After these exchanges, it will all devolve into someone calling someone else grandpa. There will be some chest beating by a HENRY that doesn’t want to wait to get their 911. Gen X-er’s will step back, letting the Boomers and Millennials fight it out.
Yeah, that’s basically every 911 lease thread.
Naturally, this could all be avoided if people simply stopped shopping for cars with a monthly payment in mind.
Search the threads. Unless you live in Canada and trying to dodge insane luxury car taxes, it makes zero sense to lease a 911.
Now, in response to my post, like clockwork, there will be someone trying to justify the stupid high money factor that they’re paying on their 911 by stating that they don’t have to worry about diminished value in an accident. Of course, they will fail to understand that between the money factor that they’re paying, and the set residual value, already build in that potential car accident that they may or may not have.
Someone will also chime in “a lease is really just a different type of loan”. OK, sure, a loan with a terrible interest rate and additional tax obligations in some states. You will not come out ahead on a 911 lease.
This will be followed by someone that says that they only pay cash. Then, another, that uses a Credit Union with such a low interest rate that the money is practically free. Let’s not forget the folks who pop a text to their private banker and pay less than 1% on a loan due to their considerable portfolio. There are options not available to everyone.
After these exchanges, it will all devolve into someone calling someone else grandpa. There will be some chest beating by a HENRY that doesn’t want to wait to get their 911. Gen X-er’s will step back, letting the Boomers and Millennials fight it out.
Yeah, that’s basically every 911 lease thread.
Naturally, this could all be avoided if people simply stopped shopping for cars with a monthly payment in mind.
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10-28-2021, 10:59 PM
#23
Rennlist Member
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AlexCeres (10-29-2021)
10-28-2021, 11:18 PM
#24
RL Community Team
Rennlist Member
Rennlist Member
With interest rates so low, and Porsche lease terms being what they are (sh!tty), better to finance and either sell early or pay it off.
Same result as leasing, but don't have to put with the Porsche lease terms.
Same result as leasing, but don't have to put with the Porsche lease terms.
10-28-2021, 11:52 PM
#25
[QUOTE=detansinn;17753064]There are so many posts and threads on this, because people who have leased other luxury cars, Mercedes, Maserati, Alfa Romeo, Aston Martin, Audi, BMW, etc, assume that leasing a 911 is a similar affair. Let’s be clear, it is not the same experience — unlike those other automakers, Porsche does nothing to subsidize 911 leases.
Search the threads. Unless you live in Canada and trying to dodge insane luxury car taxes, it makes zero sense to lease a 911.
Now, in response to my post, like clockwork, there will be someone trying to justify the stupid high money factor that they’re paying on their 911 by stating that they don’t have to worry about diminished value in an accident. Of course, they will fail to understand that between the money factor that they’re paying, and the set residual value, already build in that potential car accident that they may or may not have.
Someone will also chime in “a lease is really just a different type of loan”. OK, sure, a loan with a terrible interest rate and additional tax obligations in some states. You will not come out ahead on a 911 lease.
This will be followed by someone that says that they only pay cash. Then, another, that uses a Credit Union with such a low interest rate that the money is practically free. Let’s not forget the folks who pop a text to their private banker and pay less than 1% on a loan due to their considerable portfolio. There are options not available to everyone.
After these exchanges, it will all devolve into someone calling someone else grandpa. There will be some chest beating by a HENRY that doesn’t want to wait to get their 911. Gen X-er’s will step back, letting the Boomers and Millennials fight it out.
Yeah, that’s basically every 911 lease thread.
Naturally, this could all be avoided if people simply stopped shopping for cars with a monthly payment in mind.
My 2 cents:
No argument that a base rate via PFS of 4.8 on a lease is higher than market, however, a purchase would trigger sales taxes on the entire sales price vs. sales tax on each monthly payment in Florida. This would result in an additional expenditure of roughly $8k on a modest $112k build which can be avoided if you lease in FL. As a result, my practice has been to lease a P car and drive it for 18 - 24 months and then sell same to a Dealer, or private party (through a Dealer).
9 times out of 10, the P car is worth in excess of a Dealer payoff and any surplus reduces my overall cost.
Search the threads. Unless you live in Canada and trying to dodge insane luxury car taxes, it makes zero sense to lease a 911.
Now, in response to my post, like clockwork, there will be someone trying to justify the stupid high money factor that they’re paying on their 911 by stating that they don’t have to worry about diminished value in an accident. Of course, they will fail to understand that between the money factor that they’re paying, and the set residual value, already build in that potential car accident that they may or may not have.
Someone will also chime in “a lease is really just a different type of loan”. OK, sure, a loan with a terrible interest rate and additional tax obligations in some states. You will not come out ahead on a 911 lease.
This will be followed by someone that says that they only pay cash. Then, another, that uses a Credit Union with such a low interest rate that the money is practically free. Let’s not forget the folks who pop a text to their private banker and pay less than 1% on a loan due to their considerable portfolio. There are options not available to everyone.
After these exchanges, it will all devolve into someone calling someone else grandpa. There will be some chest beating by a HENRY that doesn’t want to wait to get their 911. Gen X-er’s will step back, letting the Boomers and Millennials fight it out.
Yeah, that’s basically every 911 lease thread.
Naturally, this could all be avoided if people simply stopped shopping for cars with a monthly payment in mind.
My 2 cents:
No argument that a base rate via PFS of 4.8 on a lease is higher than market, however, a purchase would trigger sales taxes on the entire sales price vs. sales tax on each monthly payment in Florida. This would result in an additional expenditure of roughly $8k on a modest $112k build which can be avoided if you lease in FL. As a result, my practice has been to lease a P car and drive it for 18 - 24 months and then sell same to a Dealer, or private party (through a Dealer).
9 times out of 10, the P car is worth in excess of a Dealer payoff and any surplus reduces my overall cost.
Last edited by sker; 10-29-2021 at 12:09 AM.
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Mikster (11-01-2021)
10-29-2021, 02:10 AM
#27
Complex, idiosyncratic judgment: leasing vs buying any car
Know many wealthy, financially sophisticated guys in CA who've never bought a P (or any car) in their life; always lease: $0 down, 2yr leases....and have various reasonable arguments abt their risk adjusted costs of leasing vs buying vs their return on capital, put option post-stk mkt crash/car damage, etc etc
Similarly, know many wealthy, financially sophisticated guys who have fled CA in recent years, to Miami or Austin/Dallas, to save 15%pts on their income taxes.....and just keep a Malibu place for non-winter wkends and driving roads.....but know others who've chosen to stay as CA tax residents (for various reasons) and fully understand they're paying out 15%pts/yr for CA climate/topography/Malibu cyn roads and are routinely mocked by their peers who fled to FL/TX 0% income tax regimes but opportunistically still enjoy Malibu as seasonal visitors w/o facing CA income taxes
Many similar judgment calls re: optionalities in these lease vs buy decisions.....though far more trivial than 15%pts of income tax delta for any high-earner
Know many wealthy, financially sophisticated guys in CA who've never bought a P (or any car) in their life; always lease: $0 down, 2yr leases....and have various reasonable arguments abt their risk adjusted costs of leasing vs buying vs their return on capital, put option post-stk mkt crash/car damage, etc etc
Similarly, know many wealthy, financially sophisticated guys who have fled CA in recent years, to Miami or Austin/Dallas, to save 15%pts on their income taxes.....and just keep a Malibu place for non-winter wkends and driving roads.....but know others who've chosen to stay as CA tax residents (for various reasons) and fully understand they're paying out 15%pts/yr for CA climate/topography/Malibu cyn roads and are routinely mocked by their peers who fled to FL/TX 0% income tax regimes but opportunistically still enjoy Malibu as seasonal visitors w/o facing CA income taxes
Many similar judgment calls re: optionalities in these lease vs buy decisions.....though far more trivial than 15%pts of income tax delta for any high-earner
10-29-2021, 02:25 AM
#28
Except it’s not an idiosyncratic judgement at all. It’s cold math. For your own circumstances one saves money, and the other just wastes it.
Most people passing up a 2-3% interest rate with a credit union for a 6-7% interest rate with Porsche are just wasting money. Do your own math, by all means. But if you can’t be bothered to, “Porsche leases are terrible” (in the US) is a solid rule of thumb.
Most people passing up a 2-3% interest rate with a credit union for a 6-7% interest rate with Porsche are just wasting money. Do your own math, by all means. But if you can’t be bothered to, “Porsche leases are terrible” (in the US) is a solid rule of thumb.
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