Thoughts in leasing vs purchasing

[ilsaair]

leasing this car puts all the risk of functional obsolescence because of new/better tech onto porsche. on paper if you plan on keeping the car longer than the term it looks like owning is a better choice but I am betting that new better EV tech will evolve over the next few years and I won't be stuck with an older out of date car.

100% on target. I was going to buy my 4S - the dealer said with the rapid changes in technology I was better off letting Porsche Financial take the risk. I'm OK with that - I think in 36 months the new Taycans or whatever they will becalming them by then will likely be getting 400+ miles per charge. Yes - I'm sure they will cost more but you may want to think of the Taycan more like a piece of technology equipment than a car.

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[kort]

Everyone always says this but frankly, it's the same thing with gasoline engines. The technology changes over the years from turbos, twin turbos, mild hybrids, Bluetooth, Android auto, Apple carplay, navigation, lane keep, Collison avoidance, etc are no different.

The real benefit to a lease is simply the business deduction or if you plan to trade frequently. Else, buying is generally the better route.

I disagree with the analogy that changes in gassers is similar to the changes in EVs, I related the changes that caused my first tesla to become functionally obsolete in a year after my purchase.
Like I noted keeping the car for a long time was not part of my plan, I have no business to deduct the costs with, it was a simple calculation and awareness that three years down the road will bring vastly improved EVs and that I am shifting the risk of ownership to porsche.
If you plan on keeping the car more than the term of the lease, something that I've only done twice, a 911 that I kept for nine years and a MB that I drove for 12 years, owning the car is indeed a better choice financially. that said leasing for me works out better for me. we all have our reasons for our choices and what works for one isn't always a solution for others.

 

[kort]

100% on target. I was going to buy my 4S - the dealer said with the rapid changes in technology I was better off letting Porsche Financial take the risk. I'm OK with that - I think in 36 months the new Taycans or whatever they will becalming them by then will likely be getting 400+ miles per charge. Yes - I'm sure they will cost more but you may want to think of the Taycan more like a piece of technology equipment than a car.

if you think of the car the way you think about your Iphone then leasing makes a lot of sense. when shopping for an Iphone you could save a bit of money buying an Iphone 10 but most people opt for the latest and greatest tech found in the latest model available. EVs are similar in that regard.

 

[DerekS]

I leased a Porsche one time. Never again.

Why? I loved the car too much! I went over the mileage limit by a ton, unapologetically.

Also at the lease end term, all kind of normal wear items would have been repair costs due to me. Any chips at all? Repaint. Scuffs/wear on the leather? Repair/replace. Star on the windshield? Replace, etc.

I ended up selling it to Carmax instead of completing the lease with Porsche and I came out ahead.

 

[Klepper]

leasing this car puts all the risk of functional obsolescence because of new/better tech onto porsche. on paper if you plan on keeping the car longer than the term it looks like owning is a better choice but I am betting that new better EV tech will evolve over the next few years and I won't be stuck with an older out of date car.

I wholeheartedly agree with this, but I will add that Porsche is a very smart company, and they are going to minimize that risk by setting the residuals as accurately as they can, and in their favor. They probably know better than anyone what new/better tech is coming within the next 3 years.

 

[kort]

I wholeheartedly agree with this, but I will add that Porsche is a very smart company, and they are going to minimize that risk by setting the residuals as accurately as they can, and in their favor. They probably know better than anyone what new/better tech is coming within the next 3 years.

that's the fun part, the residuals is akin to a premium paid on a put. either you got it right or they got it right. regardless IMHO leasing better than being an unhedged owner

 

[Klepper]

that's the fun part, the residuals is akin to a premium paid on a put. either you got it right or they got it right. regardless IMHO leasing better than being an unhedged owner

Yup, but the other cost to be hedged is the difference in money factor vs buy rate, which is significant.

 

[nycebo]

Porsche always wins. Consider the recent quite for a 4S (42 months, utpp miles):
*current money factor on quoted lease of 5.7% vs 2.2% on a quoted traditional financing
*current residual of 50% vs figures quoted below.

That's a lot of cheddar left on the table for your put premium. If you really traded options, you'd know you're being robbed presently because PFS know folks like Kort are willing to pay it. Nonetheless, that's the beauty of the market...everyone can do their own math and pick what's best for them.

I still contend that the business deduction remains the principle reason a lease would be much better.


Quoting...
The Loup Ventures team started by looking at an Autolist survey, which included 1.6 million data points gathered between January 2012 and August 2016. Autolist found the following amounts of depreciation after 50,000 miles:

Tesla Model S: 28%
Lexus LS 460: ~32%
Mercedes S-class: ~36%
Porsche Panamera: ~37%
BMW 7 Series: 40%
Audi A8: 40+%
Jaguar XJ: 41%

 

[rich_r]

I disagree with the analogy that changes in gassers is similar to the changes in EVs, I related the changes that caused my first tesla to become functionally obsolete in a year after my purchase.
Like I noted keeping the car for a long time was not part of my plan, I have no business to deduct the costs with, it was a simple calculation and awareness that three years down the road will bring vastly improved EVs and that I am shifting the risk of ownership to porsche.
If you plan on keeping the car more than the term of the lease, something that I've only done twice, a 911 that I kept for nine years and a MB that I drove for 12 years, owning the car is indeed a better choice financially. that said leasing for me works out better for me. we all have our reasons for our choices and what works for one isn't always a solution for others.

I think it's safe to say Porsche won't be making updates to hardware as frequently as Tesla did though. So far they have built out the lineup and made minor trim/option changes since the Taycan was introduced. Expect that to continue with some slightly more significant changes for the facelift in a few years. Essentially they are following the traditional Porsche playbook as far as the Taycan is concerned....very predictable. The next major milestone in EVs (solid state batteries) are so still years away from mass production. Basically, I think your experience with Tesla had more to do with the way that Tesla likes to do things vs being an EV (as one example the introduction of "autopilot" had nothing to do with EV tech).

 

[Bill4444]

In normal situation I would lease.
With given supply shortage, depreciation will be less than normal so I would buy the car.

 

[f10tt]

In normal situation I would lease.
With given supply shortage, depreciation will be less than normal so I would buy the car.

I would still expect a 50% hit in the first three years regardless. There's a worksheet floating around from Germany on Taycan depreciation and while not the same in the U.S. they're estimating 47% depreciation over 3yrs/45,000 miles. That supply shortage will not last forever and when it catches up a market correction will happen.

That being said, I'm leasing it for the deduction.

 

[Bill4444]

I would still expect a 50% hit in the first three years regardless. There's a worksheet floating around from Germany on Taycan depreciation and while not the same in the U.S. they're estimating 47% depreciation over 3yrs/45,000 miles. That supply shortage will not last forever and when it catches up a market correction will happen.

That being said, I'm leasing it for the deduction.

I would expect 25% over 2-3 years …

 

[zer0t]

BofA ended up giving me 1.79 for 60, 100% LTV somehow. The payments with no money down (either lease or purchase) are with in a few dollars of each other. I think the residual and rate must be poor on the lease.

I don't know how long I'll keep this but it could be 5 years. I don't know what I'd get my wife next that could be better than this.

 

[charliemathilde]

BofA ended up giving me 1.79 for 60, 100% LTV somehow. The payments with no money down (either lease or purchase) are with in a few dollars of each other. I think the residual and rate must be poor on the lease.

I don't know how long I'll keep this but it could be 5 years. I don't know what I'd get my wife next that could be better than this.

the residual is bad. < 50% for 3 years. But probably fair.

the rate is a complete scam. 5-6%. Easily 3x higher than buying. If you can’t offset this is mega tax savings, it’s just an awful deal. Porsche leases are universally terrible.

 

[f1eng]

I take the view a bit along the line of a comment an Actuary made to me many years ago "if somebody is prepared to insure you you don't need insurance"
If the dealer is heavily pushing lease deals it is because this is where the biggest profit/bonus is for them.

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