Leasing vs Buying

Hi, Putnam Leasing appears to be geared for this type of work.
I cannot say more, as I have no personal experience with them.
Check them out at www.putnamleasing.com

 

For me leasing has worked out great for my daily driver and my wife's daily driver since we both put about 10K per year. I've gotten sick and tired of trying to sell cars or trade them in the the hit you take usually makes leasing more financially feasible. That is, provided you got a good deal to begin with. Got to know what the numbers mean before you do it. For a Ferrari or other exotic? I can't imagine it makes financial sense at all. I lease cars that are at the end of model years or maybe not loved by the masses(like my 2006 BMW 530iT for example). It typically doesn't work for cars high in demand. The only advantage would be if your cash poor but make a salary that can afford the monthly payment then it might get you into an exotic. IMO, if that's what it's going to take, then you shouldn't be looking at these cars to begin with.

Jeff

 

No simple answer, especially on high dollar purchases. Cash: ok, but it warrants NO discounts for the purchase ... cash has no advantage. Leases & Loans turn into immediate cash, so at the end of the day it's cash anyhow. At most dealerships, offering cash lessens profits, don't do the old "how much if I pay cash" routine, that actually works to your disadvantage. Wiring bank to bank money transfers (nationally & internationally) are the only way to quickly and expediently transfer large sums to us. Finance: we can arrange any term financing (24-60 months is very common), even with zero dollars down if your credit & income is strong enough. Competitive finance rates come from Bentley Financial Services, Maserati Financial Services and JP Morgan Chase, plus others. We can even arrange financing for any make, model or year car that we sell. You'll need depth (equally high dollar amount loans in the past), a good credit score & healthy income. p.s. We have no way of obtaining financing for marginal credit. Leasing: How is it different from financing? In its simplest terms: You're paying the depreciation & interest monthly, and accounting for the disposition of the car (turning it in at the end) in advance. If you need tax advantages as a business or sole proprietor, leasing wins. Depreciation plus interest makes leasing tax deductable for most business applications (see your CPA). Luxury automobiles are the most logical to lease, and there is virtually no upper limit to eligible cost. Leasing also takes some of the sting out of sales taxes by taxing the monthly payment, not the entire purchase amount (don't confuse this with ownership taxes & fees for lic. plates, which you still have to pay). Conventional closed end leases (80% of our lease business) and several variations of open end leases (sometimes called simple interest leases) are available. Call for details on the difference, it can be a big surprise. Yes, leasing delivers the most car for your monthly expenditure. But... leasing is a commitment that is inflexible & therefore costly to get out of. Once you lease, it's yours till the end, or bring lots of money to pay off your remaining contractal obligation... that's pretty simple; but no one seems to get it. Principal is amortized slowly on a lease because the debt is never designed to go to zero; no one seems to understand that either. You cannot easily trade in your leased car, because lease debt is structured completely different from a loan. But at the end of every closed end (conventional) lease, you turn in the old car & get a new one; it's painless and becomes the primary logic for leasing in the first place: easy and quick, always drive a new car. Leasing usually requires a higher credit score than most purchases. Tie your lease to your own trading patterns & mileage; If you normally trade after 18 months, don’t put yourself into a 5-year lease (yet people still do that every day too). Credit challenged a bit? We've even found a special leasing option for you, but still requires high documented income. Now, if you keep your car forever, don't lease...conventional financing or cash is best. And we discourage those 120 month finance plans for all the obvious reasons; if you need the lower payment that bad, perhaps you're stretched a bit too thin already & should lower your sights. We can tailor almost any plan to your situation. And the answer to the most frequent finance question of all? No, you can't put the car on your credit card.... cards typically pay merchants with 96 cent dollars, & we won't do that for anyone. From www.ferrariofdenver.com

I personally like to lease cars because there is no hassle of selling the car like Jeff said. I also don't put that much miles on the car a year and I leave it stock so leasing is a pretty good choice for me. There are advantages and advantages of leasing and it all depens on how a person would use it.

 

I would say that if you can lease your daily driver and own your toy which is for the most part what these cars are then thats the best approach I always lease my non toys as it works out well low mileage trade up after 3 years .

 

You are paying more to lease, so for me, that doesn't make a lot of sense.

However, in all fairness leasing has a couple of strengths. For instance, if you want a Ferrari in an unloved color, such as green exterior with black interior, then leasing is smart because you have a built in buyer at the end of the term: the leasing company.

So that makes it easy to "sell" a car that would otherwise prove to be unsellable.

Likewise, if you are leasing an exotic that happens to increase in value over your term, then you can buy your leased vehicle and flip it for a profit. That's the exception rather than the rule, though.

Don't be surprised if your leasing company makes you purchase Ferrari's extended warranty for used vehicles, and it's not cheap. Don't be surprised if you get dinged for condition/miles when you turn the car back in, either.

You are also going to be hit with higher car taxes on your leased vehicle (at least, it's that way here in Alabama). Your insurance might be a bit more, too.

Another problem with leasing is that you are discouraged from modifying the car. Do you really want to buy a cool new Tubi exhaust for a car that you won't have for long?!

Well, if you can't modify the car then your overall enjoyment is going to be restricted. You can't enjoy the full potential of ownership.

So are you going to put the best gear oil and engine oil into a leased vehicle, or suffer from slightly notchy shifts during your ownership, instead?

...and let me tell you...you do *not* want to be writing up any "Ferrari" expenses as "business" deductions on your taxes ("Hello Mr. IRS Auditor"). Might as well just bend over because here comes your audit.

So the leasing angle from a business perspective completely falls apart for exotics if you are concerned about tax audits.

 

+1

I lease my daily driver and get a new one in November (every 3 years). I get bored of modern cars after a couple of years anyway and like the no hassle turn-in. It's always under warranty, so repair costs are zero, and I'm driving something new and dependable. Also, the usual hairline scratches and normal wear don't bother me because it's not mine.

Moneywise, as Jeff said, the depreciation hit, plus the aggravation of selling it yourself, plus the savings in sales tax... if you plan on buying another car in 3 years, leasing is easily the better move. If you stick with your car for 10 years, just buy it.

I don't think I'd lease an old Ferrari. You're going to be putting thousands of dollars into service, maintenance, etc., over the years you have it. And that's not over-maintaining -- just keeping it road-safe and dependable.

But the big thing for you, as a business owner, is how you'll explain your leased Ferrari as a business expense.

 

Yeah -- what he said.

Unless you like appearing in the local newspaper.

 

Well, I will never lease. Never have, never will. Long term owner of 4 vehicles. I agree with yous that lease is less hassle, but you pay for it. Also, I am a business owner, and my business benefits from my practices and the bottom line.

 

Leasing is the best way to go for a business use vehicle...it actually comes out cheaper than buying due to the many tax advantages to leasing over buying. But, if it is a personal use vehicle, buying makes more sense as the tax benefits are not there.

 

That is the common belief, but unfortunately, it is a myth. The concept of the "tax advantage" has been taken at face value for years. Many dont even reflect on what it actually means. It is good to be able to write off an expense and decrease your actual taxable income, but ONLY if it makes sense economically. Tax advantage is a term that is thrown around so much by car dealers/merchants in general who dont expect consumers to question the logic of this dogma.