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Old 05-12-2008, 10:20 AM   #1
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Lease a Boxster ?

Saw this on the web this morning :

http://www.porsche.com/usa/boxsterleaseoffer/

So, I started crunching some numbers...


Option 1

$590 / mo for 36 months = $21,240

Add the $4909 due at lease signing

Purchase option at end of lease is $30,000

Total = $56,146

Of course, if I went with this I would probably have to finance the $30k at the end of 3 years. So, $30k over 5 years at 7.5 % would be $600 / mo

Total for Option 1 = $62,149

Option 2

MSRP of car is $47,790

What if I finance through Porsche for 7 years at 7.5 % ?

Then, $733 / mo ( $61,572 total )

Option 3

To finance this over 5 years at 7.5 % would be $957 / mo

Total = $57,420


I can see a $600 / mo car payment for 8 years easier to stomach than a $950 car payment for 5 years or a $750 payment for 7 years.

So what am I missing ( aside from paying $5k more over a 8 year period ) ?

Nick

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Old 05-12-2008, 10:46 AM   #2
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Option 1 is like buying a stock for $60 and selling it 3 years later for $0

Option 2 and 3 is like buying a stock for $60 and selling it 3 years later for $30
(unless you bought a 993, those guys who leased their 993's must be pissed).

Unless you use your car for work and can get those juicy deductions, leasing or buying new is the worst nightmare of any financial advisor. You would be surprised how many people who can afford to buy new are buying certified pre-owned. With the economy changing in a big way (not just a cycle anymore) people are not buying or leasing luxury items the way they used to. The oppourtunity cost is simply too high for many in the market. Capital One Auto finance is about to take a ginormous hit on their car loans this year which will further tighten the credit market (less buyers) making depreciation rates for new cars look really frightening. It will be interesting to see if Luxury car makers continue raising prices in the coming years. I was at a Saks 5th Ave in Florida this weekend looking for a tuxedo tie and I think you could hear a pin drop in the store.
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Old 05-12-2008, 10:47 AM   #3
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This is something I've been thinking about for a bit (except I've been crunching C2S numbers).


IMO its a bad idea to finance beyond 5 years, and even that is pretty long. One, the car will be out of warranty for many years while you're making a payment. Two, will you still want that car in 8 years? Or 7? Or even 6? You'll still be making payments. And Three, you'll be upside down for a very long time on the loan, so if for some reason you want to dump the car you'll be taking a hit.

If you want a new Box I'd finance for 5 years with a hefty down payment.

BTW, what options are you looking at getting and what color?

EDIT: I agree with PL. Get a used one. If you are patient you can find exactly what you are looking for with very few miles and someone has already taken the big price hit.
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Old 05-12-2008, 10:58 AM   #4
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I don't know your personal financial situation but in my opinion leasing is not the way to go. You payout, but get nothing to show for it when the lease it up. If you can buy, buy, because at the end of the day you own it, have equity and haven't just being paying rent.
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Old 05-12-2008, 11:03 AM   #5
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^ very true I can think of no better time (possibly ever).... to be buying a second hand Porsche and no worse time in buying new or leasing.

Although with gas about to hit $5 its going to be p-a-i-n either way. Those guys driving those thirsty twin turbo 911's must be crying.
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Old 05-12-2008, 12:03 PM   #6
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Nick, I don't know the tax laws in Chicago, but I think you're missing the sales tax in your calculations. In most states you pay tax on the part of the car you lease. So in addition to the $4909 due at lease signing, you may have a few more grand you'll have to plunk down in order to drive off. Leasing CAN be a smart choice, but one of the big benefits of leasing (namely avoiding a big outlay of cash all at once) is lost in this deal.

I don't think this is a very good lease deal, but for other reasons than the previously stated opinions. 1, this lease deal is nothing special, it's been around since I was looking for my Boxster almost a year ago. And 2. Lease deals will get much more aggressive later this year. Remember in recessionary times, new car sales go down, while used car sales go up. The biggest discounts can currently be found in new cars, while used cars are keeping the lights on in most dealership right now.
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Old 05-12-2008, 12:56 PM   #7
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Thanks guys. Looks like I'll stick to the original plan

When I bought the Boxster I promised my wife no more cars for 5 years.

Well, that was 2 years ago. In 2011 ( when I'll be 40 ), hopefully my car will still be worth $10 - $15k and I can trade it in on a new one.

Oh well...

Nick
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Old 05-12-2008, 02:28 PM   #8
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Why finance through Porsche at their highway robbery rate? When I was shopping rates back in Jan, my Credit Union had 4.9%. I wrangled a 4% loan from somewhere else. Don't know what the going rate is now, but it has to be better than 7.5. Finacing over 4 yrs may be affordable with a significantly better rate.

But you didn't hear it from me. I don't want to get you (and me) in trouble with the wifey.
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Old 05-12-2008, 06:30 PM   #9
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I am waiting for the right Boxster coming my way and my rule is always this..."if you can not paid off your loan in three years, you really can't afford it".
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Old 05-12-2008, 09:36 PM   #10
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Quote:
Originally Posted by baseball
Nick, I don't know the tax laws in Chicago, but I think you're missing the sales tax in your calculations. In most states you pay tax on the part of the car you lease. So in addition to the $4909 due at lease signing, you may have a few more grand you'll have to plunk down in order to drive off. Leasing CAN be a smart choice, but one of the big benefits of leasing (namely avoiding a big outlay of cash all at once) is lost in this deal.

I don't think this is a very good lease deal, but for other reasons than the previously stated opinions. 1, this lease deal is nothing special, it's been around since I was looking for my Boxster almost a year ago. And 2. Lease deals will get much more aggressive later this year. Remember in recessionary times, new car sales go down, while used car sales go up. The biggest discounts can currently be found in new cars, while used cars are keeping the lights on in most dealership right now.

I had to pay a nice huge chunk of taxes on my car to the tune of 9%, so don't forget to factor that in.

There sometimes could be a benefit to leasing, but I am of the opinion that a lot of people lease because they are simply trying to get more car than they can afford and just budget in a payment every month. I also believe a lot of people really don't understanding financing or leasing and just show up and go "What can you get me for $550 per month?"

I think leasing can works well for those who turn their cars over every three years or so, but I still don't like not owning my car, even if I don't really "own" it until I pay it off. As far as tax benefits, I am able to write off about 50% of my mileage as a business expense and neither of the CPAs I've used has said leasing would benefit me. I still get a write-off, just taken a different way.
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Old 05-12-2008, 10:53 PM   #11
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personally, I would never lease, to me its like throwing ur money down a toilet and flushing lol and thats my theory for buying brand new cars as well...but then again I hate interest rates too so i only buy cars in cash... I'm a cheap bastard i guess hahaha but i hate parting with my money lol
anyway, stick to the car you have now i agree that now is a bad time to buy new/lease...just wait it out a bit

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Old 05-13-2008, 07:01 AM   #12
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nick! where u looking? talk them down to about 41-42 as low as 40 on a nicely equipped box or cayman.......similar to the one below....the MSRP is only suggested....don't give up yet crunch the nubers at 42....see what you can get
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Old 05-13-2008, 08:44 AM   #13
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How much could you get off a Cayman. Boxster's fully loaded can come down about 8,000 or so. I would assume a Cayman could also be discounted well. They seem to have more cayman than Boxster. Did the Cayman sell well this year?

PS... I love the white Boxster in the signature below. White works so well on this car.
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Old 05-13-2008, 10:19 AM   #14
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Generalizations about leasing vs buying are like all generalizations, not very useful.

The financial issues are done fairly quickly, and the devil is in the assumptions. I can make anything look good based on what assumptions I use in the comparisons. The future is going to be what it is, not what we assume it to be.

Then, there are the emotional issues. I have done both, so not an issue for me.

Think, analyze, act, and good luck.


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