cgomez

Agree. It is ALWAYS better to have a higher residual. It's the bank's (or Porsche Financial) bet on the future value of the asset. Let them hold that bet at the higher value posible, and then you make the choice at the end of the lease, while you pay the least amount possible while the car is not yours.

It's basically like having a FREE option on NOT buying the car. What if you crash it? It certainly would be worth less at the end of lease, even if properly repaired, and its the bank's loss not yours.

Alan Smithee

Everybody's needs are different, but I'd want a low residual if planning to buy at the end of the term. Bigger write off through the business during the term (for me at least, the whole point of leasing), more cash back if I change my mind and decide to sell it (for instance if it's damaged, turns out to be a lemon, or something better comes along), and lower sales tax/license fee basis if I do buy it at the end.

mooty

for tax write off, yes, bigger pmt is better.
however, the idea of getting more cash back if you terminated lease early wont work. unless your pmts are HUGE, in fact, bigger than 60 month financing AND with a big cap reduction at front, it's most likely you be upside down, unless you put very very little miles on the car.

so big pmt will allow you to be less upside down.
but since i am upside down, i still rather pay the big bill later than sooner.

unless the tax write off is more beneficial than the opportunity cost lost. but in most cases, the tax saving should just be a bonus, b/c it will not override the lost opportunity. at least not for me. but i drive right to the mileage limit of my leases.

Alan Smithee

Seems to me that 997 residuals, while about average at ~50% after 48 months (GT3 included), are quite a bit lower than retail. For example, I don't think we'll see 996GT3s with average miles selling for $50k in the next six months.

pole position

LOL, for the 1000000000000000000 time there ain't no equity in a lease, period, today ,not a hundred years ago, unless you lease a 599 or Scuderia at Msrp and cash out but that is , see above one in 100000000000000000000.

BTW, the deal is ok for a relative hot car, he is certainly not getting worked over and for the comments about the residual, you want the highest one possible , even , like in this case , it means going 10 K a year because it results in the lowest payment. Only a fool would buy a car at the end of a lease because the car is old news and way better technology is already out there. If you like the "raw " feel , get yourself a 911S, that will satisfy that urge instead of turting around in a fairly new old car. PAG has a tendency to improve their product.

Last but not least, residuals are wholesale, not retail values. Banks dump cars at dealer auctions to get out , they are not in the business to open used car stores and grind with every mooch or lay down in sight.

mooty

50% for 48month is likely 10kmiles/year. assuming you get your money's worth, you should have 48k miles at lease termination. at that price, car is about 60k tops, most likely lower b/c you are competing with cars with sub 20k miles. you cannot just transfer the lease. you must buy it out (pay tax on residual, approx 4-5k) if you take that off the mkt value, you are very close to residual. you may not be upside down but very close. and this is at lease end. so with this logic, if you terminated early, you will be upside down.

Snowboarder54

This continued talk about "mileage limits" is driving me crazy!!! You guys have to drive these cars!!!! Remember what Zorba said abiut the greatest sin ever? It also applies to driving your Porsche. 10,000 miles a year??????

mooty

right the with ya.
by end of agust, i should have 9k on the clock.

Paul523

If everything goes smoothly during the lease there is no problem w/this, and some interest is saved on monthly pmt, but Greg I don't know that it's possible to recover any of the upfront cap cost reduction if hypothetically, God forbid there's a total/ theft of the car.

Maybe with *gap insurance* there is some recourse(?)... anyone have the definitve answer on this scenario? ...in any case I would hate to get entangled in an insurance squabble w/lessor in attempting to recover all or part of a large cap cost reduction.

Alan Smithee

Simply not true. Plenty of people 'profit' on leases. I know two people that recently made money back at or near the end of the term...which means there was equity. One was on an Acura MDX, the other a Mini.

pole position

Gap insurance takes care of the balance if the vehicle is a total loss but you are not getting your drive off's back.

Example: the car is wrecked beyond repair and the insurance company pays market value but your pay off is x amount higher. Cap insurance will cover the difference so it does not come out of the customers pocket.

mooty

did they use ALL the mileage they were allotted?
if not, they left money on the table, yes, you can call it "equity" or you can call it "overpaid" lease pmt b/c you didn't use everything you paid for.

i can see it happening on mini, b/c in the past you had to wait to buy new so many would just buy used. but mdx is hard to get equity. the only situation i can see him getting money back at end is one, large cap reduction up front or two, he's way below mileage.

pole position

You "heard" or "saw". I did it for 20 years +. Leases are not designed to create equity and as I mentioned earlier, what happened in the 80's when consumer leasing was still a infant does not matter today, hell they had open end leases back then, talking about getting buried for good.

You have to pay sales tax on the residiual, registration(if applicable) and most likely the lease termination fee. If you wait until the last minute to get your "buyer", lol, they will also hit you for the inspection fee plus if that results in repairs that go beyond the average wear and tear . That comes out of your pocket too and then we have the possibilty of excessive miles which also result in penalties.

I am sure your are good at many things but automobile leasing /business are certainly not your strong points and I wish you would stop spreading misinformation .

But , this is the net and everybody is a expert, race car driver, price fighter model dater and god knows what else.

OldGuy

Just for example my lease on the 997 GT3 was 48 months 1800 drive off and the payment was like 2000. I dont remember the residual because I paid it off before the first payment. I just wanted to get this one home and it was optioned the way I wanted it.

Alan Smithee

Newsflash: You're no different.