csorrows

Was talking with a Porsche dealer over the weekend about various financing options, including leasing, and the finance guy said that Porsche Finance doesn't allow you to lock-in terms at order.

Does that sound right???

So what happens if you order a vehicle, and then something happens that makes the financing or lease terms worse by the time it comes in and increases the monthly payment or downpayment too much? Are you just out of luck, and if you refuse delivery you lose anything you put down?

That seems really strange to me that financial terms aren't locked in.

VGM911

What was his response when you asked him these specific questions?

ADias

I'm sure you can always bow out. In CA you always get your deposit back.

csorrows

I didn't. When he told me that, I thought it was odd but whatever, so I didn't pursue it. But when I got to thinking about it later, I thought it was more than just odd...it brings up a serious issue of what happens if the terms get all jacked up while you wait to take delivery?

And yep - I do live in California, so maybe there's some state-level protections regarding that type of thing. I'd be really ticked off if I put money down to order a car and then the financing didn't work out and I lost my deposit.

Tcc1999

If your curiosity rises to the level that you really need to know, why don't you just call PFS directly. It could be that they'll tell you the same thing your dealer did - of course, dealers/sales people always tell the truth and know everything, A to Z, about PAG policies/plans and subsidiary operations not to mention the regulations (e.g. refund and other details of deposits) of the states they operate in.

RonCT

It's not odd at all. You are asking for them to guarantee the cost of money today for a transaction that won't happen for many months. The cost of capital then can be significantly higher (or lower). This is typical and I've honestly never heard of it being otherwise, unless maybe a 30 day rate lock.

If you want the current financial special, then you need to follow the terms of that special and probably buy something off the lot (or in-route, located from another dealer, etc.).

BostonDuce

It's short term money-not like a mortgage. Locking in short term finance rates today is even more risky for a finance company because the S/T rates have nowhere to go but up.

With a lease, your residual changes each month, making your starting payment impossible to predict out in the future.

In all my past purchases,including fleet vehicles, you roll the dice to see what terms will be out there when the car hits the ground.

Only thing you can be sure of is the percentage off the MSRP at delivery you negotiate. Unless your deal has a lot of room in it, dealers won't protect you from a increase of MSRP after you order either.

BD

csorrows

That's all very interesting, because I was also looking at 2011 BMW M3's, and they told me they COULD lock in terms (lease or purchase) at the time of order, AND that if rates dropped before delivery, they'd lower them in my favor (but not raise them if they went up).

(I still decided I don't want an M3, BTW...my passion is with the 911, and that's what I really want)

Whatever I get, I'll probably have to order it. I saw a Guards Red 2008 C4S with black interior which I loved, but the financing numbers just weren't working out because I'd have to dip too much into savings to get the monthly payment to where I'd feel comfortable with it.

I wasn't looking for a black interior, but this car had the COOLEST interior trim options also in Guards Red, including the deviated stitching, and I decided if I spend that kind of money on a car, I want those options. So I guess I'll hold off a year, continue saving money, wait for the new model to come out, then be able to put down more and be in a better position so that financing won't be as much of a concern. And be able to personalize it to what I want.

I'd be a little leery of getting the first model year of a new design, though. Maybe I could get a hell of a deal on a 2010 instead.

Dave I

Residual %s change from month to month, at least with PFS they do.

You are not guaranteed to get your deposit back in California; I learned this the hard way.

SeanInLA

Don't be so sure on getting your deposit back based on financing. I would want to read the CA law in full before I make any decision. And just because it's a law does not mean it's enforceable on the spot. You need to be prepared to get a lawyer and spend a few years in court.

Use an extreme case for an example: If you order a Lime Green Car, with Red Interior, Pink Stitching, etc. good luck ever seeing that deposit back. Dealers aren't stupid and they have a right to protect themselves too. There are times contracts are written as NON-REFUNDABLE for a reason.

csorrows

SeanInLA's lime green color brings up an interesting point. Because there's a lot more selections in optioning out a 911 vs. an M3, perhaps Porsche takes the more conservative route in enforcing deposits or financing terms.

Because there's a lot fewer selections for M3's, BMW is able to more control what people order and thereby make it "safer" for the dealers and themselves. Even the BMW Individual program isn't available in the US, so people can't get too wild with options here.

BostonDuce

Wow, that's repealing the laws of physics.

A quick check showed only financing deals on the '11 M3 (no leases), so they must be using some other money source.

BD

csorrows

Could be. There were multiple lending institutions on the credit app they gave me. Once was BMW, I think one was Bank of America, and I can't remember who the third was.

But the BMW guy I talked to told me they could lock in terms at time of order, and if the rates dropped prior to delivery, they would drop them in my favor. I very specifically remember him mentioning that.

SilverForumSurf

Yup 100% sure you can lock in BMW rates for at least 60 days.
Anyone lock in Porsche lease rates?

winkingchef

Comon guys, I'm not even in finance and I know it's possible to buy a hedge on future loan rates.
Whether or not Porsche is trying to save money by refusing to is another matter.