Anyone lease their 458?

Residual was set VERY VERY low so that's why I took it.

I'm a business owner. I get 100% tax write-off. So, it's a LOT more beneficiary for me.

 

330k list, less 75 makes it 255k that's leased for 5 years. Do you mind me asking what was the residual?

 

$141K

 

i'd love to hear how it's a 100% expense. you in the auto biz ?

 

Yes. Auto parts manufacturing, Import/Export, Distribution Channel, Auto tuning shop, Used Car Dealer and New Car Broker. Enough revenue to write it off. ;-)

 

Does anyone know if dealers can mark-up the interest rate on an FFS lease (as most try to do on a regular car lease)?

I'm getting quoted a .0029 money factor versus the .0027 quoted earlier in this thread, despite medium term rates sitting at lows for the year and down 50-60bps in the last 6 weeks.

Basically, would be helpful to know the buy rate that FFS offers.

 

Whats the penalty for early lease termination?

 

I don't think there is one. If there is, it would be a few hundred dollars.

Penalty is not the problem. It's what's the car worth against what you owe to the bank.

You do know that leases do work as purchases in terms the value X the owed money, right?

Think it of purchase. It's the same, basically...

I always lease all my cars and I never ever completed the lease term. I always sold the car before the lease was over. Never seen any termination fees so far. All I have to do is to pay the payoff balance. I lost money many times due to car value being lower than the owed money but that was about it.

 

The only financial decision that makes any sense is not to buy one in the first place. I love it when someone trys to apply logic to buying a Ferrari whether you lease it or buy it. I never finance anything I don't have to have.

 

wanted to chime in here:

there are 2 ways you should look at leasing... one is renting a vehicle for a SHORT time, the other is renting to BUY but without cash upfront. both offer businesses the benefits of full depreciation of payments and if you live in a high sales tax state, the spreading out of that high cash output over several years. money factor is the same thing as interest rate on a normal loan.

if you look at it like renting (with option to buy, but you should forget about this option it is designed to confuse you and allow them to make more money off you) then you go for:
-low money factor - obvious this is the interest you are paying
-short term - you want to be in the newest model cars and not stuck in one for 4+ years
-low down payment - this money is gone right away, like instant depreciation, and time value of money is worth much more in your pocket than paid up front
-high residual value - the higher the value, the less you are paying monthly (you are basically paying the difference between sales price and residual value.) So you want them to value the car as high as possible at the end of lease which makes your payments smaller during the lease, but they will try and confuse you and say no lets make residual value LOWER because then you can buy it at end lease. if they make lower residual value, you already paid for it in monthly payments which would be higher! remember you don't want to own this car, you want out so you can get into the next model.

renting to BUY at the end is similar to a normal car loan. the benefit is that you are "loaning" on a smaller amount rather than the full value of the car. this is for cash flow sensitive people. i however do not see the value in buying a depreciating asset (unless for sentimental value) so i would not advocate this method.

 

its each to their own. we've tried the leasing option on cars previously. its not for us. i plan on driving my 458 on average 18-20k miles a year, whereas a lease option would only most likely give me an upper limit of 5k miles. if i did go for the 20k miles limit i would end up paying for the car in the payments anyway and the balloon payment at the end would be small anyway, but my monthly payment would be a lot more anyway, in the end you always pay a lot more the lease route than outright purchase.

sunny

 

330k sale price
75k down
141k residual
3100 monthly payment

basically you are financing 114k + sales tax (330k x 10% sales tax = 33k) *** i used full sales tax when should have been 40% but whatev its only 15k difference
so essentially you are financing 147k over 5 years

the good news is that is a GREAT way to get into a 330k new car
the bad news is that is a TERRIBLE interest rate somewhere around 10% on the 147k
it's about 40k interest you pay

total expense of 261k reducing taxable income at 35% tax savings = 91k you save in taxes so apply that as savings on your car

261k - 91k you essentially paid 170k for 5 years with the residual of 141k = 311k for the car... and that is spread out over 5 years! not bad...

that is actually quite nicely done

 

yes but whilst doing that how much have u actually driven and enjoyed the car? watching every mile you do so that you don't go over the mileage allowance.

excuse my naivety but $3100 per month for 5 years (i.e. 60 months if not 61 depending on finance deal) is roughly $185k.

185k +75k + residual = near enough $400k from those figures? (obviously if you buy the car at the end of the 5 years) If I'm wrong i apologise. Trying to work out how it is beneficial in any sense other than the initial monthly outlay, at the end of the day it will hurt a lot

Sunny

 

3100 x 60 months = 186k
186k + 75k = 261k which he is business expensing against other income so it reduces his overall income that he pays tax on
assuming a 35% tax rate he is essentially saving 91k that he would normally pay in taxes
so you take that 91k out of the price of the car

remember he has to maintain enough annual income to offset the 261k he is paying over 5 years and be in a high tax bracket i assumed 35%
it's a very complicated strategy, at first i saw the interest rate of 10% and was like NO WAY but it actually works out quite well

agree mileage restrictions suck tho

 

it seems in the usa there is no taxation on company/business cars? so you can take out that 91k saving. here in uk company cars get taxed heavily on based on their carbon dioxide emissions and obviously ferraris would be in the top bracket. to have a ferrari as company car would probably mean a further expense of 90k here in the uk, so definitely no saving to be had.

Thanks for clearing that up.


you guys are lucky. mileage restrictions are awful especially on such cars as these when all you want to do is drive them!

sunny

 

however, can you not do a similar thing on a straight hire purchase deal? where theres no mile restrictions and the car is yours at the end of the term, sell it if you want, but interest rates are usually much better


sunny

 

bankrate.com shows the avg 60mo new car loan rate at 4% so it is possible assuming he can expense TOTAL COST through a purchase rather than lease

the only issues would be much higher monthly payments (like 6100+ monthly) since he is paying FULL amount over 5 years without balloon payment at end, in the lease option he can walk away and have only paid 170k over 5 years which is about 2833 monthly... not bad at all for a 330k car.

 

agreed but i think the hire purchase option is much safer, maybe you should not be 'buying' the 458 if you can not afford to pay the full monthly payments? that is a question for yourselves - obviously everyone works their money differently. at the end of hire purchase car is yours, you actually have quite a bit of value in that car if you have stuck to the mile limit had you gone for the lease purchase and at the end of the day I'm sure it'll work out cheaper per month and more satisfying?

sunny

 

OK I dont have the big bucks that many have on this thread but am contemplating looking into a 60 mo. open ended lease on an '04ish spider. My thinking is that alot of the depreciation has set in and the residual wont be as great as a difference from new. My plan is to keep the car for a yr or so and turn it back in after making the payments during that time. Any feedback on the pros and cons (hoping more pros) from any of you much smarter than me. Also assuming $100,00 for the car what would you expect the open ended lease to run considering $down, monthly payment, anticipated expenses at the end of the yr., etc?

Thanks for all replies to help me determine if this is feasible.

 

Most leases, especially on used cars, will have their residuals set well below what the market value will be at the end of the lease. Easy protection for the leasing company.

You'll be better off financing the '04 car and selling it in a few years than leasing it...considering that you believe the majority of the depreciation has already taken place. I doubt you'll be able to get a lease deal that accurately reflects that.

Finance it, or pay cash, drive it and then sell it. You'll always be ahead in pure dollars...if this weren't true then leasing companies wouldn't make any money.

 

I have leased and purchased cars.

Once I could afford it, I pay cash for cars and houses.

This really boils down to how we use money and our personal desires. I like to "own" and not pay money a second time for the same thing. Others, may not have the money to buy something and need to make other arrangements, or are confident they can make more money with savings and compensate for an otherwise less than desirable payment arrangement. This can be risky. Allot of people used to own nice things, but no more. Unforutnately, too many want too much too soon and suffer for it (whether they buy or lease). Best

 

Thanks! Any idea as to what I can expect to pay on a $100,000 '04 spider such as the monthly payment, assuming little down, residual, what I should look to pay, etc?

 

Seems more practical --any other suggestions or assuming keeping the car for about a year, would this be the way to go by running through equity line and selling the car thereafter? Thanks - great forum and I appreciate all the feedback.

 

Frankly I'd suggest just waiting a year if there's something else you want. From personal experience I would have been better off taking my own advice...