Buy/Finance vs. Lease - Pros & Cons

PanameraFrank

Well-Known Member
First Name
Frank
Joined
Sep 6, 2019
Threads
14
Messages
912
Reaction score
1,490
Location
Seattle
Vehicles
Taycan 4S
Country flag
If the residuals are that high on the Taycan, they lease terms will be much better (like the Macan with the very attractive leases).
You can always lease and sell the car over the buy out out of the lease term.
The lease terms are terrible on the Taycan, that's the point. You're getting killed on money factor & residual and they won't budge on it. Buying out of a lease to sell the car is arguable worse, you're getting killed on lease payments and then throwing away more money to remedy your mistake.

Finance if individual, lease if business. Porsche leases are awful.
Sponsored

 

caytan

Active Member
First Name
Zim
Joined
Feb 13, 2021
Threads
2
Messages
44
Reaction score
30
Location
Seattle
Vehicles
2020 4S
Country flag
The lease terms are terrible on the Taycan, that's the point. You're getting killed on money factor & residual and they won't budge on it. Buying out of a lease to sell the car is arguable worse, you're getting killed on lease payments and then throwing away more money to remedy your mistake.

Finance if individual, lease if business. Porsche leases are awful.
I don't think its that bad or simple. MF on lease is 3.55% equivalent. Financing is probably 2.55% so you are looking at 1% APR difference which on 36 month lease translates to ~$550/year!

Buying out the lease at the end is the same as buying car upfront, what is really the difference? $550/year!!!! But with lease you get safety net of capping your residual and ability to simply walk away all for just $550/year. That's a great bet.

If residual is much more than Porsche expected you can buy it and turn around and sell it. If its about the same or less you made money.

Owning luxury expensive vehicle like this is PURE money throw away. Count on ~$55k expense to drive this car for 3 years.

Whether you buy it outright, finance or lease you will be out $55k
 
Last edited:

Mr.Smith

Well-Known Member
First Name
PaulS
Joined
Mar 1, 2020
Threads
62
Messages
986
Reaction score
1,002
Location
Los Angeles
Vehicles
RS E-Tron GT, VW ID.4 Pro
Country flag
The lease terms are terrible on the Taycan, that's the point. You're getting killed on money factor & residual and they won't budge on it. Buying out of a lease to sell the car is arguable worse, you're getting killed on lease payments and then throwing away more money to remedy your mistake.

Finance if individual, lease if business. Porsche leases are awful.
The current lease terms are horrendous, but the car is new, its their first EV so residuals are up the air. Porsche being the most financially strong OEM and conservative, they wont put out a risky lease.

Residuals are the #1 dictator of the lease term. When I looked at a Turbo, the payments were up there with a Rolls Royce because the residuals are in the low 40s on the Taycan .

If residuals will increase to the mid 50s, then you have a compelling lease
 

jkjjpc

Well-Known Member
First Name
John
Joined
Jan 17, 2020
Threads
14
Messages
124
Reaction score
74
Location
Washington DC
Vehicles
2020 BMW X5 40i, 2020 Tesla Model 3 Performance
Country flag
Current MF is 4.8%. For my ordered 4S with an MSRP of about $142K, the residual is 55% with 36/7500. I live in Washington, DC where there is no sales tax when an EV is purchased, but 10%/month use tax on lease payments for all cars (I'm not sure if this is intentional to encourage purchase versus lease). I calculate $21,915 in interest, use tax, and acquistion fee for a lease against $0 fees for a purchase. I estimate that the residual value of the car after 3 years would need to be <41% for the lease to be the better option.
 


OP
OP
SeattleYates

SeattleYates

Well-Known Member
Joined
Jun 20, 2020
Threads
5
Messages
60
Reaction score
50
Location
Seattle, WA (USA)
Vehicles
'22 Taycan 4S, PanameraTurbo,993cab,i8/M5/M3/914
Country flag
Current MF is 4.8%. For my ordered 4S with an MSRP of about $142K, the residual is 55% with 36/7500. I live in Washington, DC where there is no sales tax when an EV is purchased, but 10%/month use tax on lease payments for all cars (I'm not sure if this is intentional to encourage purchase versus lease). I calculate $21,915 in interest, use tax, and acquistion fee for a lease against $0 fees for a purchase. I estimate that the residual value of the car after 3 years would need to be <41% for the lease to be the better option.
Dealer says MF on Taycans is now .0035, which is considerably worse than the .002 people were quoting in this thread. :confused: Buying is starting to look better....
 

mandoyoda

Well-Known Member
Joined
Mar 20, 2021
Threads
12
Messages
356
Reaction score
264
Location
London
Vehicles
None
Country flag
I have a similar question but for the UK.

I posted this in another thread, but it seems more relevant here. Any help on this appreciated.

I'm buying a Taycan RWD through my limited company for the current Benefit In Kind government incentives. I am considering both PCP (finance) and cash. Porsche dealers in the UK aren't offering any deals on build orders as the demand is sky high.

PCP
Deal details:
  • 36 months, 30,000 miles
  • 20% deposit
  • 5.9% APR, which is £10,000 interest on my build
  • Claim corporation tax at 19%, and VAT at 10% on the lease part of the finance
  • Claim corporation tax at 19% on the final balloon payment
  • Residual value 60% of base model
Pros:
  1. Great for cash flow with regular monthly payments
  2. Sell car at any time (pay the difference and early exit fee)
  3. Upgrade to another new car in the future

Cons:
  1. Pay a ton of interest
  2. Car is not owned by the business until the final balloon payment is made

Cash
Deal details:
  • Claim corporation tax 19% on the cash price

Pros:
  1. No interest
  2. Company owns the car
  3. Sell the car, no finance or early repayment fees
Cons:
  1. Single lump sum payment (affordable to the business) but terrible on company cash flow
  2. Single lump sum could be kept in the business

Purchasing using cash saves my company £6,000 over PCP, but at the cost of smaller regular repayments over 36 months for better cash flow.

Does anybody have any recommendations?
 


OP
OP
SeattleYates

SeattleYates

Well-Known Member
Joined
Jun 20, 2020
Threads
5
Messages
60
Reaction score
50
Location
Seattle, WA (USA)
Vehicles
'22 Taycan 4S, PanameraTurbo,993cab,i8/M5/M3/914
Country flag
Dealer says MF on Taycans is now .0035, which is considerably worse than the .002 people were quoting in this thread. :confused: Buying is starting to look better....
Correction: the MF I was quoted was. 0032, not .0035.
 

F16HTON

Well-Known Member
Joined
Feb 18, 2021
Threads
5
Messages
166
Reaction score
229
Location
Hawaii
Vehicles
992 Carrera, Taycan RWD
Country flag
Correction: the MF I was quoted was. 0032, not .0035.
Lease buy rate is .00200 right now, anything more is dealer markup to the rate. That is how they make profit, especially when they concede $$ elsewhere in the deal.

If you use a base of exactly $100K for the car (easy round number and add nothing else into equation) 36 monthly lease payment is $1560 @ .0020. Payment is $1746 @ .0032

I based this off of a 55% residual with no cap reduction, and no additional fees, just the $100K

Dealer markup is $186 per month or $6696 over 36 months.

That is why it is important to look at the money factor before you agree to a set monthly payment.
 
Last edited:

W1NGE

Well-Known Member
First Name
Adrian
Joined
Jan 11, 2021
Threads
31
Messages
8,733
Reaction score
5,213
Location
Aberdeen, Scotland
Vehicles
GTS ST, Macan T
Country flag
I have a similar question but for the UK.

I posted this in another thread, but it seems more relevant here. Any help on this appreciated.
Not an expert but don’t you get 100% capital allowance in Yr1 (UK) on purchase and zero benefit in kind NI - is that worth exploring?
 

nafzal80

Well-Known Member
First Name
Nauman
Joined
Oct 3, 2019
Threads
21
Messages
140
Reaction score
45
Location
Canton, MI
Vehicles
911 C4S, Audi Q7
Country flag
Correction: the MF I was quoted was. 0032, not .0035.
again, your dealer is charging you a markup. It’s similar to buying a car over msrp. Tell them u refuse to pay above Porsche financials mf. Most dealers don’t mark it up and if they do, they should at least be honest and tell you they are charging a markup.

you shouldn’t be paying over 0.002.
 

nafzal80

Well-Known Member
First Name
Nauman
Joined
Oct 3, 2019
Threads
21
Messages
140
Reaction score
45
Location
Canton, MI
Vehicles
911 C4S, Audi Q7
Country flag
Lease buy rate is .00200 right now, anything more is dealer markup to the rate. That is how they make profit, especially when they concede $$ elsewhere in the deal.

If you use a base of exactly $100K for the car (easy round number and add nothing else into equation) 36 monthly lease payment is $1560 @ .0020. Payment is $1746 @ .0032

I based this off of a 55% residual with no cap reduction, and no additional fees, just the $100K

Dealer markup is $186 per month or $6696 over 36 months.

That is why it is important to look at the money factor before you agree to a set monthly payment.
This is accurate. Many dealers won’t charge the extra $186 per month. 0.0032 or that extra $186 per month is ridiculous. Go to another dealer
 

nafzal80

Well-Known Member
First Name
Nauman
Joined
Oct 3, 2019
Threads
21
Messages
140
Reaction score
45
Location
Canton, MI
Vehicles
911 C4S, Audi Q7
Country flag
Current MF is 4.8%. For my ordered 4S with an MSRP of about $142K, the residual is 55% with 36/7500. I live in Washington, DC where there is no sales tax when an EV is purchased, but 10%/month use tax on lease payments for all cars (I'm not sure if this is intentional to encourage purchase versus lease). I calculate $21,915 in interest, use tax, and acquistion fee for a lease against $0 fees for a purchase. I estimate that the residual value of the car after 3 years would need to be <41% for the lease to be the better option.
many ppl buy there porsches after the lease ends and sell the car back to there dealer. It is a little risky, but you should be able to recoup around $10k by exercising the purchase option at end of lease and selling it to the dealer or better yet for even more by selling it in the market.
 

nafzal80

Well-Known Member
First Name
Nauman
Joined
Oct 3, 2019
Threads
21
Messages
140
Reaction score
45
Location
Canton, MI
Vehicles
911 C4S, Audi Q7
Country flag
Current MF is 4.8%. For my ordered 4S with an MSRP of about $142K, the residual is 55% with 36/7500. I live in Washington, DC where there is no sales tax when an EV is purchased, but 10%/month use tax on lease payments for all cars (I'm not sure if this is intentional to encourage purchase versus lease). I calculate $21,915 in interest, use tax, and acquistion fee for a lease against $0 fees for a purchase. I estimate that the residual value of the car after 3 years would need to be <41% for the lease to be the better option.
4.8% is an interest rate, it is not the money factor.

To convert interest rates to money factors, divide the interest rate by 2,400. To convert money factors to interest rates, multiply by 2,400. So 0.002 multiplied by 2,400 would equal an interest rate of 4.8 percent.

Or in this case a 4.8% interest rate divided by 2400 would equal a 0.002 money factor.

Referencing my post and other posts in this thread, your dealer isn’t charging a money factor markup or a markup on top of Porsche interest rate.

0.002 Mf or 4.8% interest rate is Porsche Financials rate for customers to lease Taycans. Anything additional is an unnecessary dealer markup.

someone else here has been quoted a 0.0032 mf by there dealer, that’s equivalent to paying a 7.68% interest rate (0.0032 multiplied by 2400) , that’s too high.
Sponsored

 
Last edited:
 




Top