Jack

[quote]Originally posted by sawmilldriver:
<strong>If you lease a car through Porsche Financial is there a fixed money factor at any given time or can the dealer mark up the interest rate and receive a financial incentive for doing so?</strong><hr></blockquote>

The answer is yes, the dealer can, and many do, mark up the so called "buy rate" of the
lease. This can translate into many thousands of dollars of extra income for the dealer.

pizmo

Total price include options= $119k

$26,000 (down) + $1450 (35payments or 3 yrs) + $78,000 (residual) = $154,750

vs Ibanez's lease

$0.0 (down) + $1615 (60payments or 5 yrs) + $ 68,550 = $165,450

Now, I'm not saying who's getting a better deal here. It's just a comparison! As far as I'm concerned...You pay NOW or LATER!

hope this help

BTW, assuming both of us own the car outright after the leasing term.

sawmilldriver

pizmo, i still think they got you, i am buying a C4S but I checked my dealer on a Turbo, for a $119K car, 39 month lease, no money down, $1720 a month including sales tax, residual $72,590

39*1720=67,080 + 72,590 = 139,670

pig4bill

[quote]Originally posted by pizmo:
<strong>Total price include options= $119k

$26,000 (down) + $1450 (35payments or 3 yrs) + $78,000 (residual) = $154,750

vs Ibanez's lease

$0.0 (down) + $1615 (60payments or 5 yrs) + $ 68,550 = $165,450

Now, I'm not saying who's getting a better deal here. It's just a comparison! As far as I'm concerned...You pay NOW or LATER!

hope this help

BTW, assuming both of us own the car outright after the leasing term.</strong><hr></blockquote>

You're ignoring the Time Value of Money. Both for the $26k you lose the use of for 3 or 5 years, and the buyout you have to make in 3 years, whereas he gets to lease it for 2 years longer.

Ibanez

Exactly right about time value factor and term of my lease.

Also, my car has a $125 sticker (not including lux or sales tax) so I had a higher amount to finance, but still had a lower residual.

In addition, if you want to get out of your lease early, any money you put down is gone and doesn't increase your resale price.

Pizmo, I am not saying you are stupid for the quote they gave you (they are the ones who came up with the numbers). I am just trying to let you know that there is a lot better way to lease than through the dealer. Just trying to help a potential TT owner!!

Alan A

Just curious - Why would you lease a car with a 4 year warranty for 5 years? Would it not make more sense to buy the damn thing. The repayments would be maybe 400-500 a month more (on a 72 mo loan) and you would only owe 25k after 5 years.
Even if it was 500 more, you still end up better off - especially if you want to keep the car.
If you don't, then why not lease for 3 (or worse case 4) years instead. At least you get the warranty then.

Ibanez

Taxes.

If I buy the car I can only write off about $2,000 per year due to luxury car limits. If I lease the car, I get to write off the whole lease payment which is about a $20k per year writeoff.

Ibanez

Also, with a longer lease the monthly payments are lower (again, time value of money) and I can always sell the car before the lease ends. If I sell the car before the lease ends then I didn't have to pay all that wonderful sales tax up front (which is throwaway money just like a down payment on a lease) like I would if I bought it (depends on what state you register the car in). I plan on flipping my car for the next generation TT when it comes out and my lease expiration/residual values will make this a good option in a few years. Who knows, maybe I will buy this car out (I love it)at the end of the lease, but whatever happens, I still got to write off the lease payments and didnt have to risk losing a lot of money if I don't want it by putting down money at the beginning of the lease.

Alan A

All fair points, although I personally would pay the extra few bucks for a 3 or 4 year lease rather than a 5, especially as I do put a lot of miles on.

Ibanez

I get 12,000 miles per year and probably will only put 3,000-4,000 per year on the car. I thought about doing four years so my car would be under warranty the whole time. However, in all likelihood I will sell the car in three or four years rather then turn it in, so I am better off with the lower payment on a 5 year lease.

TTRon

Under what condiditons can you right off a lease payment?

Ibanez

I am not sure I understand what you mean. I

f you lease a car, you can write off 100% of the lease payments if the car is for business purposes and you own your own business (this is a very general statement) Obviously, you can't lease a car for personal purposes and write it off against your income. If you own a car, you are subject to luxury car limits when writing off your business use against your business income and the limit annually is only about $2k-$3k.

If a car is leased by an employer for an employee, the employee may have additional income included on their W-2 for their personal use of the car.

However, I do not give tax or legal advice and you should consult your own accountant or financial advisor for the tax effects of buying or leasing a car (sorry, gotta include that statement!)

drkm3

I went to the locar dealer last week. Lease payment was $1801.60 for 996tt(MSRP:$126585)
Money factor: 0.00349( too high, 8.38% I think)
Residual :64%
48 months, 10k miles a year)
I am expecting around $1600.

pig4bill

[quote]Originally posted by Ibanez:
<strong>Also, with a longer lease the monthly payments are lower (again, time value of money) and I can always sell the car before the lease ends. If I sell the car before the lease ends then I didn't have to pay all that wonderful sales tax up front (which is throwaway money just like a down payment on a lease) like I would if I bought it (depends on what state you register the car in). I plan on flipping my car for the next generation TT when it comes out and my lease expiration/residual values will make this a good option in a few years. Who knows, maybe I will buy this car out (I love it)at the end of the lease, but whatever happens, I still got to write off the lease payments and didnt have to risk losing a lot of money if I don't want it by putting down money at the beginning of the lease.</strong><hr></blockquote>

How do you sell a car you don't own? My guess is you'd pay the sales tax when you bought it to re-sell. It's likely you'd have to pay a penalty for early termination of the lease as well.

Ibanez

Very simple. If you sell it to a private party then they make part of the payment for the car to the lease company and part to you. Alternatively, you could pay someone at a dealer a few hundred dollars to handle the paperwork using their dealer's license. If you trade it in, sell it to a dealer or lease a new car, then there is really very little to do on your part.

It pays to do your homework on your lease and find out what the penalties (if any) there are on a lease if you pay it off early. If you negotiate a good lease and don't pay it off in the first twelve months, you generally will not be upside down on your lease. If you get a crappy lease (that 3 something money factor lease for $1,800 is an example of a bad lease) then you will always be upside down and stuck in the car until the end of the lease.