YesItsLoaded

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I have my '07 997tt arriving next tuesday into Braman Porsche in West Palm Beach, FL, so I began to make my leasing plans. As I posted last night, I got high-balled on my Money Factor of .00380 (while paying full MSRP and a $1900 bank fee).

I called today and spoke with the FI Manager and advised I was rejecting their offer of .0038 and would do the deal at the .0032 buy rate. Her response: "No, we don't do that, I'm sorry, good bye".
I looked at my phone and thought "What did she say? No, she didn't" ... OMG - that b_tch actually hung up on me! I'm about to pay $140K for a car I spec'd and ordered 4-months ago and SHE HUNG UP ON ME!!!

I immediately called my salesman and said "Chip, we have a problem". He said "no we don't, I'll call you right back". He did shortly thereafter, and apologized for the actions of his FI Manager, and offered me the following deal:

- a money factor of .0036
- $1500 off MSRP.

What would you do???

docjackson1

see chip-you are learning-when you initially ordered the car, you should have put on the contract that you were going to lease it at the prevailing rates for porsche financial. if it was me, i would buy it at the lowest interest rate that you can get, and take the $1500 off. if you must lease, then figure out how much extra that you are paying per month for the increased money factor, multiply it by the months or term of your lease, and make a value decision as to whether the $1500 off the msrp makes it up enough for you. i can tell you that a standard deal on a turbo now would be a few grand off and financing at prevailing rates. are they screwing you a bit-yeah, a bit, but they are a south florida porsche dealer and they are used to pushing the market and making their customers pay dearly. if you were buying it in nj, you would do alot better. you have to work with what you got. i would ask him why they cannot give you the porsche financial rates, why do they have to put it to you. if it were me, i would take the $1500 off and finance it over 60 months at the best interest rate i could find and tell them that they are not going to make a bonus on a lease with me.

photonscience

From her perspective, they'd be just as happy if you walk from the deal - they can put the car on the showroom floor in SoFl and get 10K over MSRP tomorrow for the car.

I never lease a car - anything that makes the dealer happy usually makes me sad.

YesItsLoaded

Thanks Doc,

What you say makes sense. Damn, I have some good contacts at Ray Catena in NJ too!

I contacted Pentagon Federal Credit Union and here's their deal:

- 5.54% interest
- Up to 72 Months
- $100 max loan (so I would have to put around $40K down).

COMPARE:

Leasing: 48 months/.0036/$3K in inceptions/$2200 per month
Buy: 72 months/5.54%/$40K down/$1635 per month

CONSIDERATION:

- I can write off every single penny of my lease payment, but
- while I can't write off all of a purchase, my montly payment will be cut in half, and I will have that money to invest, plus I can depreciate the asset over time (giving me a pre-tax reduction in my taxable income).
- with either choice, I am able to invest my $ and make at least 10% on it blindfolded (I actually make more, but 10% is a constant baseline for me)

I guess I have to put pen to paper and determine whether it would still be more advantagous for me to lease at the current (.0036) rate ... or buy, having to put down $40K, but making half the monthly payment as a lease.

drnd

If you can put the 40k down, I would think buying is the better option. I'm just not a big fan of leasing a car.

Billy Wyatt

You think putting 40k as a down payment is smart. Got to wonder about your accounting.

texas911

The difference in monthy payments between the two is $565/month. At that rate, even if you keep the car for the full 48 months of the lease, you'll only have saved $27K vs. the $40k down payment if you purchased.

docjackson1

billy-it's not smart if you lease, but if you buy, what is wrong with it?-you own the car. over the term of the loan, you are going to pay it one way or the other-at least you are not paying interest on the 40k. let me tell you, on the ferrarichat.com, there are alot of people that will not finance, that think that either you pay cash for it or you can't afford it.

docjackson1

the important point is that his loan will almost be paid off then and he will be in positive equity on the car-he will be able to sell the car and walk away with significant cash after paying off the loan.

texas911

Even with a lease, he still might have equity. Plus he won't have spent so much to buy down the loan.

As for ferrarichat. Well great for them! I guess they're just that much better than us.

eclou

With a good fund that $40k will make 11-15% return a year compounding that over the ownership of the car and you come out far ahead

allegretto

That takes the disipline to invest it.

I have worked this over six ways from Sunday before I did it and the sad truth is that 36 mo walk-away vs. 60 to own, minimum down with either (or none) and you're about the same cash flow.

Is it a keeper or a user is the question. Once you make that decision, the course is clear and just do it.

mastiffdog

Keep it simple and easy. Put down what you can, if you have the 40K, then put it down and finance the car to own it over a term that works best for your financial situation. Get started with the credit application and paperwork with your credit union immediately if you really want the car.

Once you get everything tight and approved with the credit union, they'll work directly with the F&I person and fund the balance due on your contract. It should be an enjoyable process.

docjackson1

i agree with herman-good luck making 11-15% over the next 5 years each year.

sfbanchs

i don't mean to interrupt but take a look at ticker symbol LETRX, that will give yuou way more than 11-12% year, and has a long tenure of performance just my 2c