Thoughts on Lease vs Purchase?

[chrisk]

Problem with leasing is you pay interest rates. Not smart these days if you have the cash.
Also, I always own my Porsches quite long, obviously not BEVs so far.
So far, value preservation was always amazing, especially for the 911s. I sold one at literally no loss…

In California you pay 9.x% sales tax (the equivalent of your VAT) only for the lease amount, not the full car price. So when you lease a Taycan you pay roughly half the taxes than buying it. If you compare a 3 year lease vs buy and sell after 3 years then the savings in taxes offset (and are probably higher than) the interest rate.
You also get to keep your money and invest it.
I almost always lease when it comes to luxury cars because if you do the math the lease is almost always financially the right choice where I live and given I keep the car for 2-3 years.

Everyone's situation is different. If the sales tax is low or if you plan to keep the car longer then buying can be a better choice financially. .

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[kort]

Non-US view here but the terms of the lease being offered were absolutely terrible, from memory residual 39% at 3 years and over 5% interest. The kicker was that when I eventually managed to get the terms and conditions it specifically excluded me from being able to buy the car at the end of the lease, which might have mitigated the low residual.

I can't see a Taycan depreciating anywhere near that much in 3 years. If there's any incredible new tech that comes out (not actually that likely given eg the glacial progress by Tesla just to make slightly larger battery cells) there's always the option to just sell the thing before whatever new model becomes available.

glacial progress by tesla?
https://tesla-info.com/blog/tesla-model-history.php

 

[submatrix]

In California you pay 9.x% sales tax (the equivalent of your VAT) only for the lease amount, not the full car price. So when you lease a Taycan you pay roughly half the taxes than buying it. If you compare a 3 year lease vs buy and sell after 3 years then the savings in taxes offset (and are probably higher than) the interest rate.
You also get to keep your money and invest it.
I almost always lease when it comes to luxury cars because if you do the math the lease is almost always financially the right choice where I live and given I keep the car for 2-3 years.

Everyone's situation is different. If the sales tax is low or if you plan to keep the car longer then buying can be a better choice financially. .

Can I ask what were the terms on your lease? Residual, money factor, etc.? I'm currently leasing my Tesla but given how well the value has held up, in retrospect I think I would have come out ahead if I had bought and resold after 3 years. As a result, I was going to buy the Taycan, especially after hearing the low residuals that Porsche seems to give to the Taycan.

I've been trying to get concrete numbers from my dealer so I can make an informed decision but they are super slow. Real world numbers would be nice.

 

[Mr.Smith]

Can I ask what were the terms on your lease? Residual, money factor, etc.? I'm currently leasing my Tesla but given how well the value has held up, in retrospect I think I would have come out ahead if I had bought and resold after 3 years. As a result, I was going to buy the Taycan, especially after hearing the low residuals that Porsche seems to give to the Taycan.

I've been trying to get concrete numbers from my dealer so I can make an informed decision but they are super slow. Real world numbers would be nice.

Here are the residuals I got a few days ago:

Turbo: 36/12k - 48% MRM $183k
Turbo S: 36/12k 45% MRM $213k

 

[dickp]

Funnily enough I've found that most of my Taycan clients have paid cash for their vehicles. Very hard to convince many Taycan clients to finance or consider a lease.

My bank has quoted me a loan rate of 1.7% APR. Have not closed on the loan since my car is scheduled for a August delivery. At that rate why would anyone pay cash?

 

[submatrix]

Here are the residuals I got a few days ago:

Turbo: 36/12k - 48% MRM $183k
Turbo S: 36/12k 45% MRM $213k

Thanks. Although I'm going for a base Taycan, I decided to plug in your numbers to get a rough idea. I used https://cars.usnews.com/cars-trucks...ar-lease-calculator/2020-porsche-taycan-14135 for the lease calculator and https://www.porschefremont.com/payment-calculator/ to compare with a loan. Assuming a 150k Turbo:

Lease:
Base Price - 150,000
Down - 12,000
Residual (48%) - 72,000
Sales Tax - 9% assumed
Interest rate (.002 MF) - 4.8%
Lease Term - 36 months
Monthly Payment - $2,456
Lease Cost - $97,965

Buy:
Base Price - 150,000
Down - 12,000
Interest rate - 3% assumed, which is quite conservative
Loan term - 60 months
Monthly Payment - $2480
Loan Cost - $89,280

As you can see, the monthly payments are essentially the same. However, even if we assume an aggressive depreciation over 3 years for a loan of 52% (ie 48% residual), this means the value of the car would be $72,000. After paying off your 5 year loan of $138,000 for 3 years, you will have a balance of about $55,000 (sourced from https://www.bankrate.com/calculators/mortgages/loan-calculator.aspx), which means you would roughly pocket $17,000 from selling. Unless I'm missing something (and I probably am, I'm pretty new to comparing leases vs loans), it seems like you come out $17k ahead by buying. Granted, you have to go through the hassle of selling, but I suspect you could even sell to Carvana/Carmax for no hassle and still come out way ahead of a lease.

Hopefully someone can correct or confirm my math.

 

[chrisk]

Thanks. Although I'm going for a base Taycan, I decided to plug in your numbers to get a rough idea. I used https://cars.usnews.com/cars-trucks...ar-lease-calculator/2020-porsche-taycan-14135 for the lease calculator and https://www.porschefremont.com/payment-calculator/ to compare with a loan. Assuming a 150k Turbo:

Lease:
Base Price - 150,000
Down - 12,000
Residual (48%) - 72,000
Sales Tax - 9% assumed
Interest rate (.002 MF) - 4.8%
Lease Term - 36 months
Monthly Payment - $2,456
Lease Cost - $97,965

Buy:
Base Price - 150,000
Down - 12,000
Interest rate - 3% assumed, which is quite conservative
Loan term - 60 months
Monthly Payment - $2480
Loan Cost - $89,280

As you can see, the monthly payments are essentially the same. However, even if we assume an aggressive depreciation over 3 years for a loan of 52% (ie 48% residual), this means the value of the car would be $72,000. After paying off your 5 year loan of $138,000 for 3 years, you will have a balance of about $55,000 (sourced from https://www.bankrate.com/calculators/mortgages/loan-calculator.aspx), which means you would roughly pocket $17,000 from selling. Unless I'm missing something (and I probably am, I'm pretty new to comparing leases vs loans), it seems like you come out $17k ahead by buying. Granted, you have to go through the hassle of selling, but I suspect you could even sell to Carvana/Carmax for no hassle and still come out way ahead of a lease.

Hopefully someone can correct or confirm my math.

Did you add 9% tax on the buy calculations? That would be $13500.
Also I don't think you can compare a 3 year lease vs a 5 year load. If you plan to keep the car more than 3 years then probably buying is the way to go.

 

[Mr.Smith]

Did you add 9% tax on the buy calculations? That would be $13500.
Also I don't think you can compare a 3 year lease vs a 5 year load. If you plan to keep the car more than 3 years then probably buying is the way to go.

Tax is a big part.
Also a RWD Taycan will probably be in the 53% residual range

 

[submatrix]

Did you add 9% tax on the buy calculations? That would be $13500.
Also I don't think you can compare a 3 year lease vs a 5 year load. If you plan to keep the car more than 3 years then probably buying is the way to go.

You're right, that was a big missing piece. Thanks for catching that. If the residual is higher on a base Taycan, then maybe the difference is not so big. More to think about...

That being said, I don't see why it's invalid to compare a 3 year lease vs. 5 year loan. As long as you're talking about selling 3 years into the loan, it seems like a fair comparison, no?

 

[Mrusualsuspect]

I'm picking up my 2022 4S on Thursday and need to decide lease vs buy. The 39 month lease is was offered has a .0031 MF and 50% residual value. Seems expensive, but leasing is easier if I expect to have the car only a few years.

Also, the dealer pitched me on Porshe's Loyalty program, where they let you get out of the lease up to 12 months early if you upgrade to a newer model.

Thoughts?

 

[Mr.Smith]

I'm picking up my 2022 4S on Thursday and need to decide lease vs buy. The 39 month lease is was offered has a .0031 MF and 50% residual value. Seems expensive, but leasing is easier if I expect to have the car only a few years.

Also, the dealer pitched me on Porshe's Loyalty program, where they let you get out of the lease up to 12 months early if you upgrade to a newer model.

Thoughts?

Buy on the MF on 36months is .00210. You can't do anything with the RV, even though it's horrible.
You have a some room to negotiate the MF.

I ways like 36 months better than 39.

 

[Brazz]

I leased my Taycan basically for two reasons. 1) I’ve learned that I like to turn a car over to often really to buy it. 2) the technology is going to change so much in the next 2-3 years that I wanted the ability to change the vehicle.

Totally agree and perfectly stated! I leased for this reason...

 

[kort]

I'm picking up my 2022 4S on Thursday and need to decide lease vs buy. The 39 month lease is was offered has a .0031 MF and 50% residual value. Seems expensive, but leasing is easier if I expect to have the car only a few years.

Also, the dealer pitched me on Porshe's Loyalty program, where they let you get out of the lease up to 12 months early if you upgrade to a newer model.

Thoughts?

leasing is expensive for any porsche, but for EVs it is a viable option as the cars will evolve considerably in short period of time. see, tourismo, gts as examples of rapid changes.
the "loyalty" thing is offered to every porsche leasee. the only fly in this ointment is if supply shortages are a long term issue

 

[AV7]

I'm picking up my 2022 4S on Thursday and need to decide lease vs buy. The 39 month lease is was offered has a .0031 MF and 50% residual value. Seems expensive, but leasing is easier if I expect to have the car only a few years.

Also, the dealer pitched me on Porshe's Loyalty program, where they let you get out of the lease up to 12 months early if you upgrade to a newer model.

Thoughts?

Curious to see if they included the $7500 tax credit + any state credit in your lease?

 

[GG77]

Also leasing my MY22 4S sedan and currently waiting on final numbers from the dealership. MF 0.0024 probably and applying the federal and state EV incentives along with a $2500 dealer discount. The RV from PFS is certainly crazy but it is what it is. As a business lease for 36 months, made more sense for me in California vs a loan, esp for a first BEV.

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