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Big question will be what will the Residual Values be?
the broker I spoke to said the residuals are set by PFS, not the dealer so there’s no negotiation on RV.
when I checked the dealer site, the RV was 58-63% depending on lease term and mileage. The RV may not be the actual number from PFS and just a default %
Second question which of course only time will tell us, is whether Porsche would offer purchase MSRP discounting for leasing customers. In answer to this thread’s main thesis, our plan is to again lease the Macan EV (as we did with our current BMW iX). If appropriate we would again do a singular up-front, full pre-pay.
TC, from what I understand, PFS offers "pull ahead" programs to existing lease customers when they get inside 12 months to lease end. Programs will vary and these are not set in stone, rather they are marketing plans and utilize PFS and/or Porsche Motor marketing funds which can vary time to time. These programs, when offered, allow you to terminate your lease early without penalty provided you lease another Porsche. This is not a unique program, many OEM's and their finance captives offer similar programs.
As far as discounted pricing on a new lease, that's a function of the dealer.
I'm not totally familiar with PFS leasing, what your wanting is known in the industry as a "one pay lease" A number of OE captives have then although from experience the consumer take rate is fairly low. Ask your dealer is PFS offers a 1 pay.
What little I know that convinced us to do our first lease on our BMW was:
$10,000 US MSRP reduction if leased; and, as to why we did the one-pay of the 36 month leasing term was two factors:
*My wife and I hate anything/everything that requires one of us to monthly check that a payment I owe was made on time (even check on every auto-pay I have to insure it all went though properly); and
* When my salesperson ran the numbers with up front one-pay versus monthly, that cut our initial purchase price by a further $1,510.
What I did not do (though clearly most will) is to calculate what if I instead I had not done a one-pay but did monthly auto-pay how much I would have earned (saved) by investing that amount in a money market or equivalent interest bearing circumstance. That latter probably would have net saved us even more, but again not dealing with even auto-pay payments was preferred by us emotionally. Your decision of course might we be appropriately very different than ours.
TC OEM's offer various programs and discounts from time to time. Luxury OEM's never use rebates or cash back offers as it adversely impacts used values and brand image. So how to they discount, they utilize "subsidized leases." Since your a BMW guy too, remember the early BMW I-3's. There were few takers but BMW wanted to get these on the road. So they offered a $299, 36 month lease. That was a $50k msrp vehicle, with a payment of a $25k vehicle. They had a tremendous amount of subsidies in that lease. But, they didn't advertise them with a fire sale $20k rebate!!! Instead they did a very attractive lease payment. Right now some of the MB electric sedan's have $15k in incentives built into their leases, but the dealers don't advertise $15k off MSRP.
Typically the One Pay Lease has a much lower money factor (interest rate) than a standard lease. (Since you paid all the interest up front, the time value of money discount) My last PFS quote in May was a 11% money factor, recently I think someone posted it is now 9% and change. In either case, a 1 pay lease may knock off 2-3% off the standard rate. As far as the comparison to investing the $$'s its simple. What's the discount for a 1 pay, and how much could you earn instead in a money market or in stocks/bonds. Right now my Schwab money market account is paying 5% plus, although it will go lower as the fed and the market lower rates.
For EV buyers I would strongly recommend Lease vs.cash or finance. EV resale has been poor due to the Tesla effect (massive discounting by Tesla) as well as consumer push back on EV's. Look at a Taycan for example. We have hit the wall of 8%-10% of new vehicle sales and if you look at all the OEM';s they are delaying EV's and adding hybrids. It's not cause they don't like EV's it because the EV market is not really growing and they are all losing money.
With Leasing, the consumer has a "put' on the residual. If your Macan is worth more, keep it or trade in with equity. If not walk away. It's that simple. The Lease rates vs. loan are a little higher, you do have to pay the acquisition fee and disposition fee if you return so figure that in too. Look at those additional rates and fees' as an insurance of value premium.
I hope this helps. I've been in auto lending and the auto industry for 40 plus years and trying to help you. Best wishes!! Mike
TC OEM's offer various programs and discounts from time to time. Luxury OEM's never use rebates or cash back offers as it adversely impacts used values and brand image. So how to they discount, they utilize "subsidized leases." Since your a BMW guy too, remember the early BMW I-3's. There were few takers but BMW wanted to get these on the road. So they offered a $299, 36 month lease. That was a $50k msrp vehicle, with a payment of a $25k vehicle. They had a tremendous amount of subsidies in that lease. But, they didn't advertise them with a fire sale $20k rebate!!! Instead they did a very attractive lease payment. Right now some of the MB electric sedan's have $15k in incentives built into their leases, but the dealers don't advertise $15k off MSRP.
Typically the One Pay Lease has a much lower money factor (interest rate) than a standard lease. (Since you paid all the interest up front, the time value of money discount) My last PFS quote in May was a 11% money factor, recently I think someone posted it is now 9% and change. In either case, a 1 pay lease may knock off 2-3% off the standard rate. As far as the comparison to investing the $$'s its simple. What's the discount for a 1 pay, and how much could you earn instead in a money market or in stocks/bonds. Right now my Schwab money market account is paying 5% plus, although it will go lower as the fed and the market lower rates.
For EV buyers I would strongly recommend Lease vs.cash or finance. EV resale has been poor due to the Tesla effect (massive discounting by Tesla) as well as consumer push back on EV's. Look at a Taycan for example. We have hit the wall of 8%-10% of new vehicle sales and if you look at all the OEM';s they are delaying EV's and adding hybrids. It's not cause they don't like EV's it because the EV market is not really growing and they are all losing money.
With Leasing, the consumer has a "put' on the residual. If your Macan is worth more, keep it or trade in with equity. If not walk away. It's that simple. The Lease rates vs. loan are a little higher, you do have to pay the acquisition fee and disposition fee if you return so figure that in too. Look at those additional rates and fees' as an insurance of value premium.
I hope this helps. I've been in auto lending and the auto industry for 40 plus years and trying to help you. Best wishes!! Mike
But isn't the cost of that "put" going to be in the $10-$20K range?
But isn't the cost of that "put" going to be in the $10-$20K range?
No, your figures seem too high, The cash/finance/lease selling price should be the same. So;
VS. Finance, Leasing will add; difference in money factor (interest) vs. finance and the acquisition and disposition fees'. But, in many states sales tax on lease is based off the payments, in financing it's based on the selling price.
VS. Cash, Difference in the Lease interest cost vs. what you can invest at. I'd use 5% although it could be higher. Plus the cost of the lease fees', but may be offset by the difference in sales taxes over the term of the lease (see above).
Note, this is my educated opinion, your mileage may vary!!!
No, your figures seem too high, The cash/finance/lease selling price should be the same. So;
VS. Finance, Leasing will add; difference in money factor (interest) vs. finance and the acquisition and disposition fees'. But, in many states sales tax on lease is based off the payments, in financing it's based on the selling price.
VS. Cash, Difference in the Lease interest cost vs. what you can invest at. I'd use 5% although it could be higher. Plus the cost of the lease fees', but may be offset by the difference in sales taxes over the term of the lease (see above).
Note, this is my educated opinion, your mileage may vary!!!
I do plan to ask them for what my lease terms would be when we're closer to delivery date so I can compare and decide. If it's just like $5k difference, it does seem like a much better choice to go with leasing, will have to see.
My SA did tell me that the $7500 lease rebate thing does get passed to us, which was the original reason I even started considering a lease.
Let's see what the numbers look like next month, can't wait for the car!
Last edited by fubar.droid; 08-29-2024 at 03:12 PM.
Yeah, Leasing EV's get's the government rebate too. Under the leasing loophole in the Federal Government's EV Rebates, the vehicle manufacturing source, battery source and consumer income requirements are waived.
You definitely will NOT get the Macan EV Fed rebate of $7,500 paying cash or financing.
on top of the $7500 lease rebate, for current Taycan lease offers, I'm also seeing " $15,000 non-cash credit for eligible customers (also requires additional dealer contribution)
Does this mean the dealer must discount the MSRP for PFS to match?
I feel like pre-ordered cars are non-negotiable... Especially since I have a Turbo being delivered. What's your take?
I spoke with a broker and they mentioned the current money factor at PFS is .0038 which is 9.12%
What exactly do we need to look for in the "buyout language" besides the Section 7 "Other Charges" Disposition Fee? There should be no other charges other than the Disposition Fee.
You need to look for the language that explains what you need to pay for an early buyout (buyout prior to the lease term completing). The language I've seen on Porsche leases translates to essentially that you must pay the residual value + remaining payments - remaining rent charge (meaning you are paying the remaining "value" of the car that you have not paid so far.
This is what my dealer gave me for the lease breakdown. I am still trying to figure out whether to lease or buy since it will be my first EV and not sure if i'll love it/take a huge hit on depreciation since I typically change out cars every 3-5 years. I am wondering though (never leased a car, always bought with cash) what they require to lease, I don't work, my wife just has a lot of real-estate investments that we get like ~$200k from each year and I have a bank acct. (HYS/brokerage) with over half a million in it, would I just print out bank statements from that for 'proof of income' or do I need anything else?
This is what my dealer gave me for the lease breakdown. I am still trying to figure out whether to lease or buy since it will be my first EV and not sure if i'll love it/take a huge hit on depreciation since I typically change out cars every 3-5 years. I am wondering though (never leased a car, always bought with cash) what they require to lease, I don't work, my wife just has a lot of real-estate investments that we get like ~$200k from each year and I have a bank acct. (HYS/brokerage) with over half a million in it, would I just print out bank statements from that for 'proof of income' or do I need anything else?
Anyone knows what the "driveoff" is, at $17,500?
Looking at the lease itself
The amount paid over the course of the lease will be: $10,000 down + $55, 623.75 (that's the monthly $1,426.25 over 39 months) = $65,623.75
If you return it then, pay some extra fees but the cost of ownership would have been about $67k.
The residual value of the car being $55,597.80 - if you were to keep the car at the end of the lease, the total cost of the car would be: $121,221.55
For a car listed at $97k, the cost of leasing it is: $121,221.55 - $97,540 = $23,681.55 ($7.5k discount included!)
Now over the course of 39 months, if you don't pay for the car upfront, the money in your savings account will still accrue interest.
Assuming a 5% return (likely optimistic given the upcoming rate cuts), that would represent almost $10k in interest. So the lease cost would be about $13k.
Now let's say you buy it upfront but still want to sell it after 39 months
The cost of the car is $97.5k and you get zero interest from your savings, you paid it all upfront.
Let's be dramatic and say the car devaluates like crazy, and it only worth $35k in three years, a much worse valuation than Porsche is giving it (at $55k). That would represent a 64% drop in valuation.
You would have paid $97,500 and recouped say $35,000 selling it.
The cost of ownership would have been $62,500. Which is less than the cost of leasing.
The amount paid over the course of the lease will be: $10,000 down + $55, 623.75 (that's the monthly $1,426.25 over 39 months) = $65,623.75
If you return it then, pay some extra fees but the cost of ownership would have been about $67k.
The residual value of the car being $55,597.80 - if you were to keep the car at the end of the lease, the total cost of the car would be: $121,221.55
For a car listed at $97k, the cost of leasing it is: $121,221.55 - $97,540 = $23,681.55 ($7.5k discount included!)
Now over the course of 39 months, if you don't pay for the car upfront, the money in your savings account will still accrue interest.
Assuming a 5% return (likely optimistic given the upcoming rate cuts), that would represent almost $10k in interest. So the lease cost would be about $13k.
Now let's say you buy it upfront but still want to sell it after 39 months
The cost of the car is $97.5k and you get zero interest from your savings, you paid it all upfront.
Let's be dramatic and say the car devaluates like crazy, and it only worth $35k in three years, a much worse valuation than Porsche is giving it (at $55k). That would represent a 64% drop in valuation.
You would have paid $97,500 and recouped say $35,000 selling it.
The cost of ownership would have been $62,500. Which is less than the cost of leasing.
Really like the breakdown and the fact 5% is not possible in a zero risk investment, current 2 year notes rate is 3.9% plus the tax you pay, let's say 33% effective means you barely make 2.6% interest. That means close to $5k less interest earned.
I still would like to see my personal breakdown next month when they finally deliver my car but this gives me very little hope that a lease is the way to go.
1. The Fees' listed are not all lease fees, the PFS acquisition fee is $1,095. Total fees' listed are $2229.75. That $1,100 difference would be added to a cash or finance transaction.
2. It looks like Sales Tax in that state/county are 8.6%. On leasing the sales tax is based on the payment not the purchase price. total sales tax on the 39 month lease is $4,416.75. On a cash or finance transaction sales tax would be $8,388.44
3. Money/borrowing isn't free. The PFS rate is something like 9%. In this transaction the net cash price, or amount to finance ( after downpayment is $90k, cash/finance don't get the $7500 rebate). If you were able to get a reasonable 4% return for that $90k cash after 39 months, you would have an additional $13k in earned interest.
In summary, $1,100 + $3,970 + $13,000 = $18k Lease lift in this transaction
The drive-off is the 10,000 down payment plus the 7500 rebate cap reduction. = $17,500
Some would advise NOT to put any down payment. Incase of an incident, you won't get the 10k back.
Down payments are not required for a lease but paying the fees, taxes, etc. upfront could lower your monthly payment and total interest, correct?
1. The Fees' listed are not all lease fees, the PFS acquisition fee is $1,095. Total fees' listed are $2229.75. That $1,100 difference would be added to a cash or finance transaction.
2. It looks like Sales Tax in that state/county are 8.6%. On leasing the sales tax is based on the payment not the purchase price. total sales tax on the 39 month lease is $4,416.75. On a cash or finance transaction sales tax would be $8,388.44
3. Money/borrowing isn't free. The PFS rate is something like 9%. In this transaction the net cash price, or amount to finance ( after downpayment is $90k, cash/finance don't get the $7500 rebate). If you were able to get a reasonable 4% return for that $90k cash after 39 months, you would have an additional $13k in earned interest.
In summary, $1,100 + $3,970 + $13,000 = $18k Lease lift in this transaction
4% is not reasonable if we're talking no risk investments, aka treasuries. Current 2 year is 3.9%, plus with an effective tax rate of let's say 33%, that's only 2.6% earned. Plus every month you're paying $1400 from the principal $90K, which further reduces the net interest earned. The number will be far lower than $13K.
08-28-2024, 02:44 AM
