thoughts on dealers listing financing terms instead of prices on exotics | FerrariChat
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thoughts on dealers listing financing terms instead of prices on exotics

Discussion in 'Ferrari Discussion (not model specific)' started by LI2782, Mar 26, 2014.

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  1. LI2782

    LI2782 Formula Junior

    Jul 19, 2010
    917
    #1 LI2782, Mar 26, 2014
    came across a 'high' mileage 458 at an NJ dealer. They list the price as $199k but then advertise something along the lines of $2600/month with $5k down. This seems like a cheesy tactic to me more fitting of a Hyundai dealer than a dealer selling some pretty high line exotics that I thought had a pretty good reputation.

    Just wondering what everyone else's take is on this. Am I alone in this thought? Should I change the way I look at this or are my thoughts warranted? One of the big reasons it seems so sketchy is because of the very small down payment. I have a hard time believing anyone would even write that loan, so it makes me think something's fishy.

    edit: Just read the fine print and the payments are for a 60 month open end lease...so lease the car for $167k + tax and others or buy it for $199k + tax and fees....am I missing something here? I'm pretty sick and little out of it, but this just doesn't make sense.

    Used 2010 Ferrari 458 Italia for sale in PENNINGTON, NJ | Interstate Motorsport
     
  2. El Wayne

    El Wayne F1 World Champ
    Staff Member Lifetime Rossa Owner

    Aug 1, 2002
    18,069
    San Marino, CA
    Full Name:
    L. Wayne Ausbrooks
    #2 El Wayne, Mar 26, 2014
    What part of this makes no sense to you? It looks as though you are simply adding up the total of lease payments and thinking that this somehow constitutes a "price." The lease payment includes finance charges, but not the residual amount which will be due if the vehicle is purchased at lease end. There is no reason why the total of lease payments would be the same as the selling price. With a high residual and a low money factor, they could be much less. On the other hand, with a low residual and a high money factor, the total of lease payments could even exceed the purchase price.

    No cheesy tactic, just advertising an option for those who prefer to lease. Understandably, this might not be for you, but in my opinion, it doesn't reflect poorly on the dealer's reputation as you suggest.
     
  3. LI2782

    LI2782 Formula Junior

    Jul 19, 2010
    917
    #3 LI2782, Mar 26, 2014
    a $30k residual seems extremely low to me. I know the car is high miles already, but still just can't see a 458 trading for 30k...not familiar with leasing and especially not with leasing exotics, I just can't see how leasing this vehicle at these terms would make sense for someone
     
  4. El Wayne

    El Wayne F1 World Champ
    Staff Member Lifetime Rossa Owner

    Aug 1, 2002
    18,069
    San Marino, CA
    Full Name:
    L. Wayne Ausbrooks
    #4 El Wayne, Mar 26, 2014
    Where are you seeing a $30k residual? This is an open-end lease. I see no residual stated in the ad.

    Again, I think you are confused as to how leasing works. It sounds as though you are assuming that the total the lessee will have paid by lease end will equal the original selling price. If this was the case, why would any financial institution be in the leasing business? Apparently, you are not considering finance charges. After all, nobody loans money for free.

    If you have the cash and don't mind parting with it all at once, then this makes no sense for you. You have to understand, however, that not everyone's financial situation is the same.
     
  5. LI2782

    LI2782 Formula Junior

    Jul 19, 2010
    917
    #5 LI2782, Mar 26, 2014
    thought it said that the lease payments did not include fees so i was just taking the difference between the total of the payments(since without including fees it's just paying principle) vs the advertised price of the car...To your point of my thinking the lessee should pay as much as the buyer, quite the contrary - i thought the amount someone would spend on the lease they might as well buy the vehicle. Anyway, sorry if i ruffled some feathers and thanks for making me take a closer look at it.
     
  6. tundraphile

    tundraphile F1 Veteran

    May 16, 2007
    5,083
    Missouri
    #6 tundraphile, Mar 26, 2014
    Whenever you see the payments advertised on high end cars they are almost always (meaning close to 100%) for the lease alternative. It rarely seems to be obvious that is the case the way the ads are crafted however.

    BTW, paying $161k to rent a Ferrari for five years, then turn around and have the FMV determine the residual (probably $130k-ish) seems like a good way to pay $300k for a $200k car with this open-end lease if you actually wanted to keep it. It only makes sense if you had money to burn.
     
  7. LI2782

    LI2782 Formula Junior

    Jul 19, 2010
    917
    #7 LI2782, Mar 26, 2014
    open ended leases have no pre-determined residual value at all? I thought perhaps it just wasn't advertised here.
     
  8. tundraphile

    tundraphile F1 Veteran

    May 16, 2007
    5,083
    Missouri
    #8 tundraphile, Mar 26, 2014
    I admit I had it backwards, been a long day. There is one more piece you need to know, the assigned residual, before you determine if $2600/mo is a good deal or not.
     
  9. hardtop

    hardtop F1 World Champ

    Jan 31, 2002
    11,298
    Colorado
    Full Name:
    Dave
    #9 hardtop, Mar 26, 2014
    I have no opinions about leases but the US is a nation of payment shoppers so targeting them is a worthwhile business practice.

    Dave
     

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