I dissagree. Rates have been steadily climbing for years now. That's 'not' that bad IMO.

Could be worse. I saw someone else who wrote who's paying a much higher money factor.

 

I've purchased all my previous vehicles. However, I decided to give leasing a look and keep more ca$h in my hands.

FICO is 750 (average of all 3) -- obtained via my brother the mortgage broker.

PFS is offering:
.00295 money factor
50% residual
48mo term.

The MF is high. Although when I look at 3rd party lease offerings, they play with the numbers -- lower MF & lower residual + various fees.

A 3rd party company suggests:
.00225 mf
35% residual
48mo term

They claim it's better to have lower residual so u'll be in the $$ at the end of the lease.

I think purchasing the car outright is less hassle.

 

That money factor seems a a bit high for that sort of FICO score. Did you negotiate much on it?

 

Have noted a tone in the posts about dealers wanting profit when they sell a car. I'm not a dealer (I do business with lots of car dealers and car companies) and although I don't support "gouging" I do think that it's fashionable to bash dealers for making a profit. This is unfortunate, I think. All of us are making profit somewhere...otherwise...how would we be paying for these lovely cars?

Clearly, no one wants to get "taken" for a huge profit (I know I don't)...but I find it odd that cars seem to be the only business in which we whine about profit. My father recently had a lengthy hospital stay....$45,000 for a nice 2 week hotel with bad room/food etc. I noticed the Dr. drove a Bentley. Hmmmm....thinking...maybe he was overcharged?

I have a relative that sells cars, btw...In many cases he makes $150-$250 to sell and deliver the new cars. To be frank...it's not a good business. Very tight margins because the dealership does have to pay rent, salespeople, etc. The avg. new car dealership has about 2% after tax profit. Anyone checked what Microsoft makes these days? Yowwwww. Or google?

Anyway...I've run into my share of price gougers but with the help of this board...you can keep dealer profit "reasonable"...whatever that is!

 

wazoo-i agree with your point about dealer profit-you can't expect the dealer to give you the car without making money, otherwise, why should the dealer be in business. unfortunately, the example that you used to illustrate your good point was an ignorant one. your father's doctor doesn't make any money at all from his $45,000 hospital bill. to assume that he was overcharged because the doctor drove a nice car seems a bit inappropriate on a porsche web board, wouldn't you say? don't cloud your good point with bad reasoning.

 

i'm stupid enough to a point that i never understand the beauty of lease except the sales tax saving in CA.

using zumaron's example please correct me if i'm wrong. if paid cash he'll need to pay 94,177.50 tax included. since he's leasing the car so he only pays tax in 48 month. so after 48 months when he returns the car meaning in the 4 years term total amount out of his pocket will be 66,720.00 (1,390 x 48) + 5,412.50 (down pmt + tax) = 72,132.50. that's over 76.5% of the car's value u paid in 4 years but for nothing after. u can choose to keep the car pay the 50% residual but most likely that will not be the case so time to find another car?! if he buys the car in cash in the beginning after 4 years at least he's got a car that's worth more than 40k regardless he wants to sell it or not, right?! my mind is keep telling me the second option is much better & safer at least u got the TITLE & it's ur car rather than throwing 72k in 4 years for something u don't own or paying another 47k to make it urs.

please free my mind & tell me my logic is wrong...

 

your logic is highlighted by the fact that 20c4s paid a tremendous amount for his car, unfortunately. the $1390 payment for a 36 month term without the $5000 ccr would have been more appropriate. it seems like he is paying full list.

 

doc please explain. why 36 month term without the 5G. he said so wans't it?

 

I looked into leasing my current car. Previous to this I have always paid cash. My rationale was 1) that I always seemed to get lowballed at trade in time and liked the idea of knowing the residual value at lease end without the hassle of negotiation and 2) dealers will find any excuse (even a minor accident that was properly fixed) to reduce your trade in. Seems like a simpler solution when you trade the car in. However when I saw what I would be paying in interest I thought no way. It was more than the amount by which I have been lowballed on my trade in. I wanted to do a one pay lease thinking that I would save money on interest and still have the advantage at trade in time but even this didn't work out. If you can make more money investing your cash than what you pay in borrowing it then more power to you but I can't. I haven't made any money in the stock market since 2000 -2001 and interest rates paid on safe investments are invariably lower than what the banks are lending money out on leases.

Also I live in a state where you have to pay taxes on the entire negotiated price of the car (just as if you had purchaced it outright) not just the depreciated value so no advantage to leasing there.

Also I cannot deduct my car as a business expense so no advantage to leasing there either.

The only reason I am conisdering leasing my next pcar is because I buy 2 new cars every 4 years. If I retire in 4 - 5 years then I can't justify this expense any longer and will go with just one car. Under the circumstances this allows me to just 'walk away' from the pcar without the hassle of having to sell it myself.

A few other issues: you don't have to go to a martgage broker to get your credit scores. They are now (or soon will be available for) free once a year from the credit companies themselves. Just make an inquiry and take advantage of this. It does not affect your credit score if you do it yourself either.

Also although it is cheaper to finance your car by taking a home equity line of credit from the bank (because of lower rates and tax deductability of the loan)
it is really not a good idea to put your house at risk financing a depreciating nonessential asset. If you can't otherewise afford to buy the car then get something cheaper. Doing otherwise, IMO, is irrepsonsible.

 

Even though in CA you only pay tax on the monthly amount, the bank charges interest on the full amount not just the depreciation. Therefore, you are paying as much interest (if not more) then you would buy financing.

Monthly Finance Charge = (Adjusted Cap Cost + Residual) x Factor

Bottom line is... I'm not interested in the restrictions tied to leasing and will stay the course of purchasing my depreciating luxury assets and love every minute of it!

 

Yes, you bring up a good point. I have nothing against Drs...(or car dealers)...perhaps I didn't do a good job...I tried. My wife often advises me how ignorant I can be

I have had both great and terrible experiences with MDs...but we don't get to pick them based on price (at least...I haven't). Anyway, I think you understood what I was trying to say...albeit clumsily.

 

20C4S-my mistake, you were quoting zumaron. what i should have said was that zumaron's quote was for a very high lease payment. a car with that msrp should be $1325-$1425 dollars/month with no ccr (down payment) for 36 months and 12k miles/year. imo, paying 5k down is a bad deal on that lease, and also on any lease, it is a bad idea to put money down. that monthly payment should be for 3 years-4 years should be $100 less per month.

Wazoo-thanks for your clarification

 

I went through the calculations lease vs purchase last week when I picked up my 2006 C4s. The chices were Porsche lease at buy rate of 029 which equates to 6.9% for 48 months or purchase outright at 4.5% from the credit union. Assuming outright purchase at end of lease (50% residual), the diference in the sum of payments plus taxes plus residual purchase value, etc, was over $10,000 cheaper with the purchase than the lease. Hence, even if I flipped the car at end of financing for trade-in blue book or lower, I am still ahead of the game.

I did purchase it. I will soon post pictures.

Richard
'06 997 C43 Black/tan (seven days old)
full leather tan interior
Sport Shifter
Upgraded Bose Sound
Navigation
Sport Chrono Plus
Sport Exhaust
Color wheel centers
Crest in seats
Power seats
TPM

 

Only thing I can think of the different between lease and purchase is the tax benifit. For lease car, you can expense the full amount vs purchase. On purchase, you only can expense X amount of dollar for your deperication per year. Again, if you can afford the monthly payment, purchase is alway a better way.

 

I always recommend doing business with a larger dealership for the best deals. The have larger, often better allocation of vehicles and are more interested in volume. Finding a dealer that gives the best customer experience and the best deal (what ever that is for you, the individual) is another subject matter.


And yes, dealers DO work on small margins, however, if you read any business periodicle for your state, or area, usually a local magazine, look at the top businesses in that state. Automobile dealerships are ALWAYS listed in the top 20. They do make great money for such overhead......