Chris Y.

Hi Guys...

Sorry if this has been mentioned before, but I couldn't find anything using the search function...

Yesterday, I test drove the Cayenne Turbo for the first time and came out very impressed. All the power I needed and a very supple ride to boot.

The sales person had mentioned great lease rates on the Cayenne and mentioned a 60mo lease. I usually don't lease my cars that long, but he said it would help to keep the payments lower and I would be able to sell the car in 2 1/2 - 3 years down the road if I wanted to and pretty much not lose too much.

Does this sound like a good idea???

Thanks in advance!!!

jhunt@huntinter

Dealer said the same thing to me once on a Chevy Suburban. The lease company (Keybank) was surprised and had no intentions of letting me out at the mid way mark. Or rather they would if I made ALL the payments in advance and paid the difference between the sales price and the "residual". I had that POS for the full 60 months.

John
'79 930

DanP

Well, most would agree that 60-month leases tend to be poor financial decisions.

But then again to some there is great value in having a very low monthly payment.

Particularly when dealing with autos in the price range of the TT.

Can't speak for Chevy, but I've traded in / sold more than a dozen leased cars well before their term, and generally speaking at the practical level the average payoff from a lease has not been deadly when compared to financed ones.

Of course one considers cap reduction / money down, sales tax issues, etc.

And the issue of the Cayenne TT having a higher depreciation risk, being new. If resale tanks two years from now, you could get really stuck.

I'm probably the odd voice saying that it could be OK to do a 60 month lease with the intention of selling in 24+ months. Just an opinion.

Chris Y.

Thanks for the reply guys...

I'm going to get some figures and look it over. I really would not like to get stuck with a Cayenne for 60mo due to warranty issues, but I really like the idea of payments equivalant to an "S" at 39 mo. hummm....

docjackson1

chris-i have leased many vehicles. a good rule of thumb is that unless the car will be worth much more at lease end than the residual has forcasted, you will almost always get financially screwed if you try and trade it in mid lease. it also depends on what formula the lease company uses to caculate payoff-they can vary widely. my advice-take the shorter lease-if you can't afford the payments, either lease it for longer, with intent to keep it for the term, or lease an s, not a turbo.

mudman2

I would never go into a lease with the intention of getting out early.

Everytime I have terminated a lease early I have paid dearly, those were not planned.

I would buy it over 60 and sell early or do a Home Equity and spread it longer to get the right payment and the deductable.

Chris Y.

Actually, I found the 39 mo payment very favorable, but I will probably just do a cash deal since I will try use IRS Section 179 deductions for my business use.

I'm not a huge fan of leasing since I do love to modify my cars.

I just wanted to present the question since this is what a sales rep at McKenna said most of his Cayenne buyers do. Didn't sound like a good idea to me either, since I've heard horror stories of people trying to get out of leases early.

Thanks guys.

DanP

Trying to learn more here.

Just for the exercise of it, any members here knowledgable in this area to run some general numbers?

For the sake of using a round number, lets take a 100k sale vehicle.

Lets compare a 60 month lease to a 60 or 72 month finance at whatever reasonably achievable rates are these days (real life, and lets say 700+ beacon for this category).

Assume the depreciation rate of a Cayenne TT, if that number is available (one would think it is). Else assume plain 996 rates.

Lets also say 0 cap, no deposit / 0 down.

Ignoring everything else, what would the payoff be at 24 or 36 months?

Now taking the less predictable factors:

* Credit an arbitrary (and conservative) 5% average return on the sales-tax saved + monthlies, ammortized.

* Debit the lease-company BS early-termination fees (often unrelated to payoff, often negotiable too).

What do we have?

Would really like to hear from more financially savy folks.

Reesestewww

Leasing was the worse financial mistake i've ever made.

sasilverbullet

I have a friend that runs a high-end used car dealership. We talked at length about leasing a Cayenne. The leasing companies he deals with are VERY skeptical what the value of the Cayenne's will be in two-three years. Fortnately, I'll probably not be buying one for about a year or so. I'll be able to see how they're holding their value before making the decision to lease or not...

Chris Y.

The residuals seem to be pretty high for the Cayenne's...

I'm still deciding if I should do a Range Rover or Cayenne TT...both are very nice.

sasilverbullet

be careful...they're high now...but what will they be in 2 years...

txhedg

What about doing a balloon note loan (like a lease, where you can give the car back at the end instead of paying the resid amt, but you own the car and can sell it at any time and just owe whatever the balance is), so that you don't have to worry about the trade in price....you simply get market value for the car if you want to end it early, but can sell to a third party, and aren't stuck with whatever the lease company "says" the value is of the car....you just owe the remainder of the loan, plus the resid. That way, if the market value does plumet, you just hold on until the balloon is due and give the car back (a reason not to do a 60 mo), but if it does stay fairly high you can sell the car early to whomever you wish for a good price, and not have to worry about getting screwed by the lease co when you go to return it early. In financial terms, the balloon is a put option, that covers your **** in the event the value of the T 4 yrs from now has plummetted to 40k, it locks in your downside at whatever the resid (60k?) forecasted today to be a the end of 4 yrs (or however long the note is for). On an unknown entity like the Cayanne, its not a bad insurance policy, imho, without the handcuffs of a lease.

BTW, I'm lurking here today since I drove an S at lunch and kinda liked it......still not 100% sold though.....fun but not amazing. Didn't drive the turbo.......100k is just too much for anything that doesnt start out with a "GT" in its name (they had both a GT2 and GT3 in the showroom.....awesome)

PogueMoHone

I think you only care about the residual when you enter the lease. It should not impact any future transaction with the leasing Company (the Dealer is another matter). As I understand it the Leasiing Company will try and collect what it was entitled to under the terms of the original contract. A high trade in value may ameliorate any financial loss, but it will not impact the residual.

If you believe that the residuals are artifically high (the Car will be worth less at the end of the lease) then this can be an indication that is good to lease (provided the MF is also low)

Why? It means that the Leasing Company is subsidizing the depreciation on the car, and that is always good. Leasing can be cheaper than purchasing but it requires careful analysis.

Bad news is the early termination of the lease for the reasons stated above.

For a Cayenne, Section 179, if available, is the way to go (won't get any cheaper with the help of the taxman), and to use it you need to purchase.

Cupcar#12

i don't know if anyone has mentioned this or not - But Porsche Fincial services (or what ever they are called) is very restrictive about letting you get out of the lease - you cannot transfer the lease on to another person unless you are still on it - which is bogus IMHO) also the residuals are overerly optomistic - for instance i put 15K down on a boxster and still lost 10K when i traded it in - spendy lesson.
I'm going to wait and see what the market is demanding for a cayenne in 2 years before buying one. i really don't want to be stuck with a lease payoff more than the car is worth again.
I would not lease again - ever.
btw- i got rid of the boxster b/c it's quality was sub-par and the service at the dealer has less than optimal. Sad really.