balloon loan
08-23-2003, 12:50 AM
#16
Instructor
Join Date: Jul 2003
Location: central florida
Posts: 149
Likes: 0
Received 0 Likes
on
0 Posts
balloon loan postscript
Upon further investigation, it does appear that the balloon note is the most prudent route for my situation. Prior to his understanding the cost of the P-car that I'm getting, my accountant wasn't thinking that it was the best avenue, as he thought it would limit the amount of depreciation that I could take annually because the balloon would effectively reduce the available annual value that could be depreciated (I'm going to place the car as a corporate asset). But the TT coupe cost puts it way into the luxury class, so I wouldn't be able to take depreciation against the full value anyway without the IRS hunting me down for being the dirty dog that I am.
Capping the decision off, Porsche won't do a lease on a Euro-delivery vehicle (according to my dealer), so other than retail financing or paying cash, the Balloon is the only option. The accountant figured loosely that the lease expense write-off would roughly equal the asset depreciation I'll take anyway, so balloon seems to be the right way to go. Even if I can't take advantage of that yummy sales tax break that Lou gets up in Illinois.
There are still many unknowns (just as another poster pointed out, my dealer hasn't done one of these Porsche Options deals before, so there isn't any first-hand knowledge), such as loan term, interest rate, available aggregate mileage choices over the term, how the guaranteed residual is figured out (I am extremely interested in this calculation), downpayment options, and ?. I'm sure that all will be answered in short order, as the dealer has already paid PCNA for the car, and will no doubt be motivated to arrange this last segment of the deal.
If anyone has any insight into how the vehicle residual is figured out, please post it. Eg. is it simple math such as: retail selling price minus average annualized depreciation over the last few years for the the loan term? If that is the case, then I am hoping that the recent depreciation trends are going to reverse for the upcoming model year changes. Who knows what's to come, "just shut up and drive" will be my standing motto!!!
Thanks for all of the info.
Jeff
Capping the decision off, Porsche won't do a lease on a Euro-delivery vehicle (according to my dealer), so other than retail financing or paying cash, the Balloon is the only option. The accountant figured loosely that the lease expense write-off would roughly equal the asset depreciation I'll take anyway, so balloon seems to be the right way to go. Even if I can't take advantage of that yummy sales tax break that Lou gets up in Illinois.
There are still many unknowns (just as another poster pointed out, my dealer hasn't done one of these Porsche Options deals before, so there isn't any first-hand knowledge), such as loan term, interest rate, available aggregate mileage choices over the term, how the guaranteed residual is figured out (I am extremely interested in this calculation), downpayment options, and ?. I'm sure that all will be answered in short order, as the dealer has already paid PCNA for the car, and will no doubt be motivated to arrange this last segment of the deal.
If anyone has any insight into how the vehicle residual is figured out, please post it. Eg. is it simple math such as: retail selling price minus average annualized depreciation over the last few years for the the loan term? If that is the case, then I am hoping that the recent depreciation trends are going to reverse for the upcoming model year changes. Who knows what's to come, "just shut up and drive" will be my standing motto!!!
Thanks for all of the info.
Jeff
