F430 - Lease History found in Carfax - issue ?

Why would a lease affect the value? I would expect that it was leased as a business expense. Much easier than buying and depreciating for a business.

 

I haven't see that a lease affects any vehicle more than a purchase. If anything, it's almost better as lease vehicles are not typically modified, have service requirements, and mileage restrictions.

 

I have a different prospective... If leased I feel that the owner may not have brought the car as an enthusiast with the intention of keeping it for ever (read love) but as a temporary "fix" or a business car. I would think the car wouldn't have received he same love ..

There isn't any right or wrong answers here .. yes I can love a car and lease it (for easier write off) and then buy it back at end of lease ..etc

I am just thinking when you hear "it is a lease not worried about that "


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It's not some run-of-the-mill BMW 3 series that you lease from new, beat up/abuse and give back 3 years/36k miles later.

It's done for tax purposes on used exotics as a write-off. Does not confer any info about the quality or maintenance of the vehicle.

 

It's funny, because I would imagine a great deal of exotic owners don't intend on keeping their cars that long. I was under the impression that a lot of the new car buyers typically go through cars frequently and may hang on to a sparse few that may stand out. That's just my impression though.

 

Agree with the others, lease is just a business tactic and will not hurt the value of the car

 

Being in the OEM field for many years I can tell you most Lease vehicles are not cared for, some barely met the minimum maintenance schedule.
There is a mindset with a lease this not mine forever..the client who purchased the vehicle took better care inside and out.
Now the cars were not exotic's but were not entry level vehicles either.

 

You can't compare non-exotic leasing to exotic car leasing. Many people lease their daily driver cars for reasons other than taxes since only a business can really take advantage of that benefit. Too many times people lease a car they can't easily couldn't afford to buy with a loan or outright and when they are car-poor, they do not perform much maintenance. I believe this is one reason many car companies include maintenance so that the leased cars are maintained for their certified pre-owned sales down the road.

With exotic cars, sure there are cases of leasing for people who can't easily afford the car but usually those people do a balloon loan with the hope they can finance the balloon at the end of the term or sell the car for more than the balloon and move on to something else. If your business is paying for your exotic car, then in many cases it makes sense to lease it. If you want to keep the car at the end of the lease your business sells it to you personally. This is what I did on my GT3, since I ordered it exactly the way I wanted. For 3 years it was a lease, then I bought it off my business when the lease ended. If you look at Carfax there are multiple owners for my GT3, even though the original new car paperwork was signed by me and the 2nd owner is also me.

 

I did not compare exotic's to non exotic's I realize there is a huge difference but my perspective is from real world observation, there is No excuse for lack of maintenance when its included free or keeping the inside and outside of the vehicle a total mess.
Again I come back to my statement "Its not mine" I will not be with this vehicle forever...Oh but let me be sure to take advantage of my tax breaks.
Poor excuse in my book.!
Some poor sole will buy that neglected POS.

 

Again, the leasing (and lessees) you're describing are not at all the same as an exotic car lease.

Not sure why this is so hard to comprehend.

It's purely a different way of financing the car that provides a tax advantage. No need to get all worked up - I can't really even understand why you're trying to say with your post, to be honest.

 

If not too much effort, can someone elaborate on this tax advantage strategy of the business buying the car and leasing it to the individual?

 

The business itself leases the car, not the individual. There are a number of companies that offer exotic car leasing, Putnam and Premier Financial are two that comes to mind.

The IRS allows businesses to write off all vehicle leasing costs, so leasing allows more of a vehicle's cost to be written off by the business than purchasing, as shown below assuming a 35% marginal tax rate.

I'll use an example I found on the internet for a GT3 RS:

Purchase price: $165,000
Residual value after 60 months: $65,000
Monthly payment: $2265

Total payments that can be written off: $135,900
Tax benefit: $135.9k * 0.35 = $47,565

5 year cost of car: $135.9k + $65k = $200.9k
Total 5 year cost of car net of tax benefit = $153,335

You could also purchase the vehicle with your business and depreciate it, but for <6000lb vehicles, the IRS caps how much depreciation you can claim each year as follows:

Year 1: $12,200
Year 2: $19,500
Year 3: $11,700
Subsequent years: $6960

Cars are a 5 year MACRS asset (allowing them to be depreciated on your returns for 5 or 6 years), so the most you could possibly claim in depreciation is $64,280. Assuming 5% interest rate on a 60 month loan when buying the car:

Purchase price: $165,000
Monthly payment: $3114

Total payments that can be written off: $64,280
Tax benefit: $64.28k * 0.35 = $22,498

5 year cost of car: $186,825
Total 5 year cost of car net of tax benefit = $164,327

So you save ~$11k and have a lower monthly payment by leasing. Obviously, this delta gets bigger and bigger with even more expensive exotics as the IRS depreciation limit caps your write-offs with a purchase.

 

Do you have a podcast?

 

Wow. Thank you.

 

All 6 previous owners of my car leased it. I'm the first actual owner lol.

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The actual numbers from section 280F

Also works on planes

 

Those numbers are very out of date - circa 2009.

New table is on page 7:

https://www.irs.gov/pub/irs-drop/rp-23-14.pdf

Note that there are a couple of wrinkles to this: you can claim bonus depreciation of up to $8k in year one for new vehicles and you have include an inclusion in your income for vehicles leased at over $60k (shown on page 8 of the link above). Those 2 things make leasing slightly closer to par with purchasing, but for cars $200k+, leasing is still very much the better option for a business.

 

Thank you! I just noticed its from 2009, I'd trade the lower leasing limits for the lower prices on Ferraris tho !

 

Buy the car..fix it as problems arise..enjoy.. don't over think it.