That's eBay starting price, still has a reserve. Dealer ad shows $299k... Image Unavailable, Please Login
Just to give you guys an actual sales point. It was my white 16M on eBay in December. I ended up selling the car to a dealer for $240k. If I had it to do all over again, I would still have spec'd and bought the car new, driven it the 4500+ miles or so and sold it. Was it expensive?? Yes (probably over $100k all said and done). Was it worth it?? To me... yes. I think the market price discussions are always a bit entertaining, but it is clear the market on these cars right now sucks. I think I received less than 3 serious calls on the car, and as most people who follow such things will acknowledge, I priced the car with a clear indication that I was ready to sell it. Most advertised cars out there right now will not sell anywhere near (i.e., not within $25k of) the asking prices. You can see my car on eBay now for sale by a different dealer than the one I sold it to. I wouldn't be surprised if the next retail buyer of that car ends up paying less than I sold it for. There just is very, very little demand on the retail side and too much supply.
If theses things drop below $200k, I'll be in the market. Not necessarily to buy immediately but seriously considering it. (Don't want to be called a tire kicker or poser)
Just call Putnam or Premier and ask them about the advantages of leasing. Call your local dealer and ask them how many Ferraris that are purchased are financed. It's not that big a deal. I happen to have bought all my exotics without using lease/financing but in some cases, I've had access to money at 2.X% and had investments are 4-5% tax free so it made sense to borrow against investments rather than pay cash for the car. I've also looked into leasing when I've thought about keeping a car for a very short period of time. In the case of a lease, on a 300k car in CA, sales tax is $27k. If you plan on owning the car for just one year, you can lease through Putnam or Premier using a 5 year term and pay roughly 1/5th of the sales tax (5.4k of sales tax) in one year and pay a one month penalty and get out of the lease- you're still ahead because you didn't pay $27k in sales tax up front. You might also be earning 4%+ on the cash you didn't spend further offsetting your leasing costs. Further, some people have a business and can justify part or all of the lease as a write off- in those cases, they are paying the payment using pretax money and saving 45% in fed/state taxes on the $ they are spending. So paying 8 - 9% to the leasing company is no big deal. If you use pretax money, have $ tied up in high return investments, and/or are only going to keep the car a short amount of time, leasing can make a lot of sense. It's not a traditional lease with a residual, mileage allowance, or a required term.
Don't know how it is in other states but in NY when you sell the 1st car (trade it for another at a dealership) you get a tax credit for the tax you paid. Therefore, if you then buy a 2nd more expensive car you only pay the tax difference between the two. This makes the tax paid on a purchase much more palatable since you don't "lose" that original amount paid.
Wow, this thread came back out of nowhere. Look, I know what leasing is. I know how it works. My original point regarding leasing is..... It's not cheaper than paying cash. I don't care if you keep the car 1 year or 10 years. If you keep the car 1 year, you aren't making enough on your money in the bank to cover the cost of the lease. I bought my CS last October. I bought from a private seller so I paid ZERO in sales tax. I guarantee you I could sell my CS right now for what I have in it. Had I leased it I'd be losing a ton of money on lease payments. You can't insert a middle man between you and your Ferrari and expect that they make no money. If you are buying the car though your company (pre tax dollars), yes, you can write off the lease payment. But the lease payment isn't free. It's still costing you more than if you paid cash. If you pay cash, you can depreciate it. The deduction works whether you lease or pay cash. I have leased many cars through my company (daily drivers) in my life. I have 10 company vehicles for employees leased right now. For example, leasing a $90,000 A8 for $900 a month a few years ago. That's a great deal. Leasing a $250K Scud for whatever we said earlier?? That's crazy. Your lease payment is through the roof. I don't care that you use pre tax dollars to buy it.... It's costing you double so it all works out even anyways.
I can't believe I'm going to try to add to this thread (after following it for a while)...but I have to try to (further) correct some of what is here that is incorrect and/or misleading... To start, an open ended lease is EXACTLY like a loan (don't think "car" loan, just any old loan for a moment). You make payments of principal and interest. A lease differs from most typical loans in that a lease is structured so that you don't make payments that fully amortize the principal over the life. Rather you make smaller principal payments each month and then, at the end, you make a "balloon" payment that fully satisfies the loan (its actually an option to do so and I'll come back to that). If anyone thinks an open ended lease is any different than that, let's follow-up in a PM or a phone call. It is, simply, the truth about leasing. If you think otherwise, you are mistaken (sorry to be so abrupt, but this thread has so much crap in it that we need to get the facts out). And forget fancy web-based calculators and the so-called leasing idiot at the dealer and sales guy mumbo jumbo. Anyone can calculate a lease payment (just like a fully amortizing loan payment) on excel or with any old financial calculator. I have had sales people and the “finance manager” at dealers literally quote me a price for a car and then say “well, based on that, here is the lease payment” and it was flat out wrong! You can guess in which direction. They pretend that the calculation of the payment is voodoo science and its not. Funny thing is I’ve sat there with my HP 12C and showed them what the payment should actually be. Of course, they had typed into their program a higher price. This happens all the time. You simply MUST validate their payment calculation on either excel or with an HP or other financial calculator. So, to recap, here is what an open-ended lease is: 1) It is a loan, period. It has monthly payments of interest on the entire amount borrowed just like a standard amortizing loan. 2) It is a loan, period. It has monthly principal repayments that are smaller than those that would fully amortize the principal to zero over its life (aka "depreciation"). 3) It is a loan, period. Thus there is a remaining principal amount at the end of the lease (aka "residual value"). 4) It is a loan, period. Thus there is an easily determined principal amount at any point in time, just like on a fully amortizing loan. Advantages and differences with a loan or paying cash: 1) The entire payment is deductible for income tax purposes IF used in a business. Compared with a purchase (whether in cash or with a traditional fully-amortizing loan) wherein only a portion of the price is deductible. 2) Sales tax is calculated on the entire payment. This is both bad and good depending upon how long you keep the lease. If only for a few months, then you only pay a small portion of the sales taxes. OTOH, if you keep it to term and buyout the lease by making the balloon/residual principal repayment, then you will have paid sales tax on the entire purchase price of the car AND paid sales tax on the interest paid on the lease too... 3) You can terminate an open-ended lease at any time. The lease agreement may call for an early payment penalty in addition to repayment of the then current principal balance. These penalties are usually equal to 1 or 2 monthly payments and are often waived upon early termination. Remember, this is a loan! Thus there is a principal balance at all times that can be calculated (or gotten by asking your leasing company) and thus it can be paid down. Its not voodoo science. Just math. 4) The ability at the end of the term to have an OPTION to either pay-off the loan (aka pay the residual amount) and then own the car outright OR simply give it back is a very big advantage to leasing. This essentially puts the risk of market value declines onto the lender. You have only paid a portion of the principal on the loan at that point and you have the option of fully repaying it and owning the car free and clear or you can say, “no thanks”, if the car’s value has depreciated to a level below what you owe. That is a huge benefit. Obviously if you paid cash or if you took out a regular fully-amortizing loan, you would have by then paid the entire principal amount and would own the car. 5) Finally, the biggest difference between a regular (fully amortizing) loan and a lease and paying cash requires one to factor in their "opportunity cost" of the money. This has been talked around and even ignored in some of the posts above. To be clear, there IS an opportunity cost to every decision. For example, when deciding whether or not to pay cash for a car, one should factor in what the (let's say) $250,000 purchase price could earn them otherwise. This is easy. If you think that you can get a (let's say) 5% return on that amount by investing it, but can borrow (either through a fully-amortizing loan or a lease) at 8%, then you are economically better off to pay cash. IF, OTOH, you can borrow at a rate below what you think you can earn, then by all means borrow! Finally, to be clear, there is simply NO WAY to say that a lease or a fully-amortizing loan or a cash purchase "costs less" than one another. The answer is entirely dependent upon at least these factors: 1) How long do you plan to keep the car? 2) Can you deduct the lease payment from your taxes? 3) What is your opportunity cost? 4) What will the market value of the car be at the end of the loan term? One more thought, and some advice. Most people (maybe not Ferrari buyers) pick between cash, traditional fully-amortizing loan or lease based on which has monthly payments they can afford and balance that with a fear of the “unknown” with leasing and a puritanical dislike of borrowing unless needed (again, most people, IMHO). Ferrari buyers may likely NOT be afraid of leverage in their lives and may not care about the monthly payment amount as much... The advice is NEVER make an upfront “capital cost reduction” on a lease (aka a down payment, aka a principal reduction). This essentially ruins part of one of the big advantages – the ability to give the car back at the end and thus shift market value decline risk to the lessor. DON’T DO IT! Borrow the maximum amount if you choose to lease and thus do not make any upfront payments (other than, as required by local laws and the lease agreement, the typical license/registration, first payment, deposit/last payment). Hope this helps…(probably wont…
You've explained it well and what people that lease fail to realize is the banks understand the depreciation of cars and will front load these lease/loans to cover their ass. If they didn't they are morons. Whether or not you calculate what it should or shouldn't be the loan makers must cover themselves if they didn't with larger payments they wouldn't be in business long. Everyone and their brother would lease all of the time if they could run no risk and just suffer thru what would have to be massive payments to pay for a 250k car just deciding whenever they want when to dump them back on the bank. Leasing a car and having some stupid payment to" write off" is a red flag most don't need. Creative accounting in the end bites you. Jason 1st I wish we lived in your state. We pay sales tax on all car purchases to title the car in our state. 9% which stings on 300k cars. In the end we pay through the nose and it stinks. Others pay state income tax as we don't. Trade off I guess in the end. States without either often have a reason.
I have a 2009 with 5xxx miles at Foreign Cars Italia. It is Argento with full red/black leather interior(no tech material and lower foot wells are covered). ipod, graphite colored wheels, tri-colored stripe, painted carbon rockers, full 3M clear film on front end. Baby on the way!
If you need to keep a high level of cash onhand, you certainly should not be entertaining the thought of buying, or leasing a Ferari! Maybe a Prius.
The audit will come. See what happens then. Keep track of business and personal miles? Always excuses on how to get a toy before person can afford the toy. Remember our last banking / mortgage crisis? Better to expense something that would improve the gross profit of a company, and sorry, but a Leased Ferrari in no way increases gross profit.
