fubar.droid

I always believed buying is better if you plan to hold a car long term but since there is a $7500 tax credit that most of us don't qualify for but do via a lease, which assuming the dealer passes onto you, might change the math to make it cheaper to lease and then buy assuming the residual value is close to the FMV. I'm wondering if anyone has real world numbers to go off of to see if leasing does make more sense.

PSPJames

That is my exact question and I'm waiting to connect with my CPA to see. My initial thought was to lease to take advantage of the $7500, and then payoff the lease shortly thereafter. I just need to see the numbers first since when you lease you have the acquisition fee and then the disposal fee at the end (although I'm not sure if it applies if you buy the car).

TurboIXXI

I was also planning to lease if there is a $7500 credit then finance later hoping interest rates will drop. Looking at previous Taycan leases and residual values, it seems like leasing might be better than financing. I wouldn't expect PFS to be very generous with their lease deal either.

My other option was to finance and section 179 deduction since the car (Turbo) is over 6000lbs, but the 100% deduction wouldn't apply to SUV's. The cap is $30,500 for 2024. I need to talk to my CPA as well.

usctrojanGT3

What's the current money factor for Macan EV leases?

tmrqs

Not having a business I can use to lease the car against, it would be a personal lease.

I asked 2 dealers and on a $113k Macan, they would charge about $1.6k/mo over 39 months with 10k miles: this takes into account the $11k down already paid for the order AND the $7.5k credit. The residual would be about $61.1k.

That means $11k + ($1.6k*39) + $61.1k = $134,500 with the credit. Otherwise it would be $142,000.

Versus $113,000 if you straight buy the car (financing elsewhere or cash).

They tell me Porsche Financing can’t give great rates due to their low volumes and they don’t offer the crazy incentives other brands do.

For instance, my partner leased a Ioniq 5 and even if she paid the residual at the end to keep the car, the total amount would be less than the original MSRP.
In this case, leasing was a no brainer. But all the numbers I keep seeing from Porsche make it very unappealing…

Awas

@tmrqs
Good illustration this.
Even Porsche financing is not worthwhile as their interest rates are very high.

The best option is to pay all in cash if you can. I will dip into my savings to that, not taking any loans : )

usctrojanGT3

What is the early lease buyout fee? I would only lease the car for 3-4 months to make sure my dealer gets credit for the lease and then have my LLC buyout the lease. That way I can benefit from the $7,500 credit and no pay sales tax on the buyout amount.

Taycanted

The TLDR is you (probably) won't come out ahead by leasing and buying out. Porsche rates are horrendous on leases, as is the residual, and your buyout is all the payments + residual.

You should get a lease quote from the dealer and double check, I will, but it generally doesn't work unless the lease itself has attractive numbers (which will never happen with Porsche.)

Where this plan really works is lower cost EVs with attractive lease offers, Hyundai, Kia, sometimes BMW and around 50-60k MSRP.

Dgkli

Disclaimer: i don't know for a fact if what I say below applies to Porsche leases, but I bet it does.

For most OEM leases, the buyout is more or less remaining payments plus residual MINUS remaining "rent charge." In other words, minus the unpaid finance charge. The net effect of this is the cost to you of buying out a lease early is the acquisition fee and possibly a disposition fee, which typically are far less than $7500. You need to read the actual lease language to be sure.

Taycanted

I know Rivian is including finance charges with buyouts, which puts it at a significant net loss over just buying even with the lease 7500, and that's what I was shown when I asked for lease numbers on a Taycan a couple years ago, but I can't confirm for the Macan. I will try to get a lease quote from my SA to look it over.

It's certainly worth looking into, but I'm dubious it will work.

fubar.droid

Thanks for the numbers. This helps illustrate the choice better and I 100% agree, much cheaper to just pay cash.

tmrqs

Let us know what you find out!

usctrojanGT3

Yes, please do tell us what you find out.

redtanrt10

I asked my dealer for a Lease quote on our inbound 992. If you're looking at Lease vs. cash, the residual is irrelevant, what is relevant are the fees' and the money factor (interest rate). He told me their money factor is 0.0046, this equates to an interest rate of 11.04%. The Lease Acquisition fee is $1,095.00

In your comparison keep in mind the lease interest as well as the sales taxes are build into the lease payment.

At a $113k selling price -$11k downpayment, the lease payment includes interest on the balance and sales taxes. In your example, your average lease balance over the 39 months is approximately $82k ($103k cap cost -$61.1k residual). While the Porsche Finance rate is high at 11%, if you put that average balance into a money market account at 5% that would equate to $15.4k. Remember, you can't borrow for 0% for 39 months. In addition, I'd bet your sales tax rate is probably 6% or higher, so on a $1,600.00 payment there is probably $90.00 per month in sales tax. Spread over 39 months that's $3,510. Lastly, keep in mind on the $61.1k buyout, you only pay sales tax on that figure, not the $113k selling price.

Your comparison is off by close to $18k.

Can't compare a Macan to a Ionic. Hyundai, and other brands are offering massive discounts on EV's to move them. For example in July a Kia (Hyundai affiliate) EV6 crossover has $16.8k in incentives, BMW, MB and others have astronomical incentives on pure EV's!

tmrqs

I appreciate your explanations - and agreed, other brands are doubling down to sell their cars with discounts and very low rates, just like the Ioniq 5 example I gave.

Few things to add:

1. There are no sales tax in Jersey for EV, so $0 there. The numbers above are without tax and none would need to be added.

2. You’re right I couldn’t get a loan at 0% (unless you go for Ford or some other brand currently offering it as a promo).

3. I personally would not loan, I would either pay upfront (from savings) or lease if the numbers made sense, so I could get a new car after 3 years (preferred scenario).
Of I were to buy, my actual cost would be exactly $113k (plus registration/etc) vs much more leasing.

4. You have a point about how much interest I could make by leaving that money in a savings account - but seems I’d still be paying much more than that. No?

If I missed something, would love to understand what/where. Thank you!