If you take the car to where you purchased it , when you are ready to turn it in , they should be able to give you a check for the difference between the residual and the wholesale value of the car.

 

Do not buy the car (unless you intend to keep it), you have a payoff so if you sell or trade it in before lease end you'll pocket the equity. If you have any more questions feel free to shoot me a PM I work in the business.

 

How did Porsche get the residual value SO wrong?

 

It is done on purpose on all GT cars. Just in case someone puts the car in a wall on the racetrack, fixes it, and then returns it. No one will buy that car after...

 

That does not make sense to me.

Doesn't an insurance company, like the behemoth AIG, write backend policies for these leases and their residuals? Didn't someone fark up?

 

Residual values have a "standard" percentage the bank will use, if needed the manufacturer will pay to inflate the residuals above what realitynia to push volume. Cars like GT3/4/2 they might as well have a large margin of safety, and capitalize on making money from the lessee paying "interest" to their low residual. Unfortunately they know that if the lease is unattractive people will still figure out a way to buy the cars so it's a win win. Now thankfully porsche will let you trade the car at lease and not raise the payoff if it is not the lessee buying the car ala Ford etc.

 

That residual does seem really low. I wonder what the OPs please payment was and if he put anything down on the car. Because if he put $5k down and had lease payments for $1500/mo, after 36 months, he has paid $59k in cash. I would absolutely NOT turn the car back in under this circumstance. If he loves the car, he should buy it out for the residual. If he wants to move on, he could list it at over $85k and pocket the $30k+ to offset some of the cash he's put out over the last three years.

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The difference between the original sales price of your car and the residual value is the “depreciation” component you have been paying as part of your monthly lease payment. Ie you have already paid cash for this to take it down to this lower than market residual - so yes you should recover it and not just hand it back to them!

Said another way - you’ve paid more in depreciation over your lease term than if you had bought the car and were now selling it (if you hand it back in).

the other component of your monthly lease payment is the finance / interest charge - and they charge a much higher interest rate for a lease than if you were to finance it.

So - if you lease, you actually benefit the most if you have a car with a higher residual than what the market price is for the car - so you pay less depreciation over the life of your lease than if you’d bought it. Then hand it back in, rinse and repeat.

a lot of people are going to be in for a shock if they decide to lease now vs 3 years ago though - interest rates are higher, and I think in general residuals are now lower (as the used car market is suffering) = much higher payments.

 

No sales tax would be due since the OP never takes possession of the title. It is the dealer that takes the trade who buys the vehicle from the lessor. I have done this at least 5 times in the last few years including with private parties. I almost always lease instead of buy as a tax avoidance plan since I tend to turn my cars in 12 to 18 months.

 

The residuals are set artificially low on purpose by PFS. With popular cars like the GT's there is no incentive for them to take the risk of return for a car that has been in an accident or a change in the economy etc. They will sell all of them they build no matter what.

Totally different market for something like a base Cayman etc.

 

Correct. Leases on GT cars never make sense if you plan on giving it back due to the low residual that PFS offers. SInce GT cars hold their value well, you'll usually have a car that's worth more than the buyout at the end of the lease.

 

Thanks for the replies, all. Very helpful.