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Porsche 911 Lease Questions

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  • If it is a 2007 model year your discount is good - not so good if it is a 2006 vehicle. The payment seems inline with the market.

    Carrera S vs Targa 4 - two very different vehicles and a very personal decision. Drive both back to back and pick the one you like best. My choice would be the C2S.
  • habitat1habitat1 Posts: 4,282
    "Carrera S Cab MSRP $121,290"

    Are you kidding??

    My 2005 S Cab was fairly well loaded (nav full leather/power seats, bose, sport chrono, sport exhaust, etc.) and came with a MSRP of $102,880. The 2007 equivalent MSRP would have been $106k +/-. I got a $10,800 discount on mine in September 2005. Your quoted price is a $11,400 discount - which would be very good - except it sounds like the car is loaded up with (excuse my bluntness) a lot of cosmetic junk. There are a lot of C2S Cabs with MSRP's of 105k or less that are VERY well equiped.

    I can pretty much guarantee you that, if my assumption is correct, this car will take an enormous hit on depreciation due to the limited (in some cases NEGATIVE) resale value of custom colors, over the top interiors with graphite packages, etc., etc. I've seen cars sit on dealer lots for months with prices at or below a nicely equiped silver/black car that has decent options. If this overloaded 911 S Cab is just your cup of tea and you intend to keep it for 10 years, great. But in any less time than that, a 911 Turbo at $130k would be a less costly car to own, factoring in resale.
  • Anyone know what kind of discounts are reasonable on the new Targa 4S?

    I've seen $3k with no markup on financing. I aslo heard $5k, but there was a markup on the financing that I believe made the first deal far better.

    If the car is like prior versions, I expect that later in the model year, it will again turn out to be the least popular in the 911 family and far larger discounts will be had.

    Thoughts? Experience?
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Thanks for the insight, vwguild1. Given Porsche's traditional lack of lease support, I'm not surprised that an independent bank has a better lease program than Porsche Credit does.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi outdrguy. The selling price that you were quoted looks pretty good to me. The lease program that you mentioned looks very good as well, much better than Porsche Credit's current program for this car. If you like it, I personally don't see any reason not to pull the trigger on this deal.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi sje3333. You stated that this car's invoice is $89,205. Did you mean that is its MSRP? I suspect that is the case. If you are really getting it for $5,800 below dealer invoice, you are getting an outstanding deal. I am not intimately familiar with what the market is like for this car in your area, but this car has around a $10,000 spread between its full MSRP and its dealer invoice price. You are being quoted a discount of $5,800 from its MSRP, this isn't bad but there is still some room there. It probably wouldn't hurt to try to negotiate a little more or to shop around, but I don't know if you can do better than this.

    As far as this car's money factor goes, Porsche Credit's current buy rate lease money factor is .00310. This is equivalent to an interest rate of around 7.4%. There is a decent chance that you can do better than that by leasing through an independent bank. If one has a better program than Porsche Credit, your dealer will likely steer you in that direction.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi Caboman1. You were quoted a $11,300 discount on this car. That sounds like a pretty reasonable discount to me. Normally I advise consumers against making large down payments on leased vehicles, but if your business is paying for this lease and you don't mind risking losing this money if your car is stolen and never recovered or totaled in an accident then I guess there's nothing wrong with making one. Keep in mind though that down payments on leases do nothing to reduce vehicles' lease-end purchase prices. Your purchase option price is based upon a percentage of your car's full MSRP, regardless of how large a down payment you make.

    I also usually advise consumers against leasing for such a long time. A lot can happen over the course of a 5 year lease to make you want or need a new vehicle. Your family situation could change, your commute could change causing you to go way over your mileage allowance, your job could change causing you to want a more or a less expensive vehicle, or you could just plain get sick of your vehicle. I usually recommend that consumers lease for 39 months or less.

    If you are comfortable with entering into such a long lease and making such a large down payment, this car's price looks pretty good to me. Just make sure that the dealer that you are working with uses Porsche Credit's current buy rate lease money factor of .00310 to calculate your car's monthly payment and you're in business.

    Car_man
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  • lowbmclowbmc Posts: 3
    Hi, Mr. CarMan,

    I am not good at [I should say I am not smart enough] to understand how leasing is work, or how the money factory stuffs, can you simple talk about it? and also, I am looking around to get a costumer order on 911S [2007, 997],how many down payment do I really have to pay and also how many discount do I really get? If I put a $5000 down, the MSRP of the car is 97000, and I am going to lease the car for 5 years [ I am going to buy the car at the end anyway], how much will the monthly payment going to be?

    Thanks for your kind concern and your time.
    Lowbmc
  • lowbmclowbmc Posts: 3
    Actually the car price is 93190
  • jax1fdrjax1fdr Posts: 2
    These lease deals can be made a lot more complicated than they really are. In my opinion they try to confuse people with the money factors and residuals and so on and so forth. When they want to move a car they advertise a low payment but usually have some unusually high cap cost reduction (down payment). What you really want to do in my opinion when you lease is get as low a money factor as you can. Understanding that they can hide the money factor by artificially holding a high residual. Ask yourself one question, if you could buy this car at 72 months at zero interest would that be a good deal? I say yes. So what I use as a base line is to divide the price by 72 (months) and pay only the minimum up fronts (dealer fee, tax, tag, title acquisition). No cap cost reduction, no other down payment. For example for the 93,100 I would expect to pay around $1293. I don't worry about all the money factors and residuals, let them discount the car to get to your number. You'll have the peace of mind knowing that basically you're buying the car at 0% interest. At the end of the lease term, you just compare what you can buy your car for vs what the price of equivalent cars on the market are. If the market is lower, buy a different car. If you car is lower, you are in at least as good a position as you would have been if you had bought the car at 0% interest. You can always just walk away as well. It should be fair in most cases unless the cars demand is high. For low end cars I use 84 instead of 72. Keep it simple.
  • lowbmclowbmc Posts: 3
    very very good information! thank you=] now i have a better understanding about leasing=] thanks!
  • habitat1habitat1 Posts: 4,282
    Nice theory, but I don't think it works in practice. How many 911's have you leased and what were their MSRP's and monthly lease payments?

    I would agree in a heartbeat that if I could take the cash purchase price of my car, divide it by 72 and have that be my payment for 72 months, it would be a no-brainer deal. But in your example, you aren't actually buying the car for 0% interest, you are leasing it for 36-48-60 months after which you have nothing. Using 4 years, you are paying a total of $62,000 to lease a car costing $93,100. If that total lease cost is less than what your own borrowing cost (or opportunity cost) plus expected depreciation is, then the lease deal is good. If not, it's not. That's still pretty simple to me.
  • outdrguyoutdrguy Posts: 8
    Thanks for the reply Car_man. I'll let you know if the good lease rate holds up through the end of the deal.
  • jax1fdrjax1fdr Posts: 2
    I say it is a good deal because even in the lease, you have the option to buy at the end. In my example, if you lease a car for 36 months at basically a 72 month interest free loan, you do have a good deal, because at the end you have the option of giving the car up or purchasing it. If you BUY a car for 72 months at 7% interest you will have paid more obviosly by 36 months than my lease example. Even if the residual in the lease example is high, you have the option of buying an equivalent used car if the market is weak. You can buy your car if the market is strong. You will be ahead of the game because you haven't paid any interest. I don't know how you see it, but it seems pretty good to me. Thanks for your input.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi lowbmc. If you don't understand how leasing works, you definitely should check out the following informative articles that are available here at Edmunds.com prior to visiting any dealers: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment.

    As far as how much of a down payment you should make on your lease goes, the answer is none. I personally always advise consumers not to make large down payments on lease vehicles. Consumers who make one risk losing it if their vehicle is totaled in an accident or stolen and never recovered. All consumers who choose not to make any down payment have to pay at lease signing are their vehicle's monthly payment, a security deposit equivalent to that payment rounded up to the nearest $50 increment, their acquisition fee that is charged by the bank they are leasing through... Porsche credit charges $745, and any required state taxes or fees.

    The lease payment of the car that you are interested in will depend upon what sort of selling price you are able to negotiate on it. If you provide me with this car's approximate selling price I will gladly use Porsche Credit's current lease program to estimate what your monthly payment should be.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hey lowbmc. I see that you provided this car's selling price in your next post. Let's crunch some numbers and see what sort of lease payment we come up with. According to my calculations, if you were to lease a 2007 Porsche 911 C2 Coupe S that has an MSRP of $97,000 and a selling price of $93,190 through Porsche Credit right now for 60 months with 12,000 miles per year, your zero down, pre-tax monthly payment should be around $1,277.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    No problem outdrguy.

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  • habitat1habitat1 Posts: 4,282
    Car_man:

    I'm curious as to your thoughts on how I would evaluate the purchase vs. lease, using the figures for lowbmc's car.:

    Lease: $1,277 x 60 months = $76,620 total payments over 5 years.

    Purchase: $93,190 (I'm using this figure, although it sounds very high for a loaded 911S Coupe - I would shoot for a 10% MSRP discount to $87,300).

    Financing/opportunity cost over 5 years at 5% after tax borrowing rate = $23,300.

    Total cost of purchase = financing + depreciation. For lease to be a better deal than purchase, $76,620 needs to be less than $23,300 + depreciation; i.e. depreciation needs to be more than $53,320. In this case, if the car is worth more than $39,870 in 5 years / 60k miles, you would have been better off buying.

    Lots of assumptions there - but in my case, where the underlying cost of borrowing is less than 5% after tax, I would have a tough time leasing. Not to mention that I would hate monthly payments of nearly $1,300 in the few months that we had crappy winter weather. I bit my big bullet once, but prefer that to 60 deep pin pricks.

    What say you?
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi habitat1. 60 months is an awfully long time to lease a vehicle for. One problem with this long a lease is that Porsches only come with 4 year / 50,000 mile warranties. This means that you will have to pay out of your own pocket to fix anything that goes wrong with your car during the last year of your lease or have to pay an excess wear ad tear penalty when you return your car. Furthermore, a lot can change over the course of five years. Your life could change causing you to need a larger or a smaller vehicle. Or you could just plain get sick of your car and want something new. Or your commute might change causing you to go way over your car's mileage allowance. I usually advise consumers to lease for 36 months or so, 48 tops.

    Also, Porsche never provides any lease support on the 911. This means that if you want to lease one through Porsche Credit you will have to use its standard lease money factor of .00310. This is equivalent to an interest rate of over 7.4%. You may not even be able to find a dealer that is willing to lease you this car without marking your money factor up. If this happens your interest rate will be even higher than this. It looks to me as though you would probably be better off financing your new 911 rather than leasing it.

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  • habitat1habitat1 Posts: 4,282
    Thanks for the response and you basically hit upon several reasons why I paid cash for my 2005 911S Cab 19 months ago. Bit that big bullet once, but no regrets or monthly reminders since.
  • chrmdomechrmdome Posts: 107
    Greetings.. TO ALL:

    With all due respect... if there was a " magic " formula that would provide anyone with a " good " deal leasing a $100k vehicle, there would not be a single leasing company in business. IMO from personal experience leasing cars.. unless there is a good business reason that allows you depreciation or a deduction, the leasing companies have you by the short hairs..good luck.

    Chromedome
  • rr4mywiferr4mywife Posts: 53
    I have a '06 Carrera lease with 15 months remaining. With great sadness (borderline depression), I have to transfer the lease. However, Porsche Financial Services will keep me on the "hook" as the second lease holder. In the event that the primary lease holder misses payment or does not pay for extra miles or excess wear-n-tear at lease end, they come after me.

    To protect myself, I have asked the new leaser to deposit 2 payments in escrow with an attorney (signed legal contract as well).

    Is this a good idea? Any other ideas? Thx
  • kyfdxkyfdx Posts: 66,831
    Have you looked into selling the car? Check your payoff on the lease and see how far upside down you are.

    There is no way that I would transfer a lease, and still be on the hook for it.. even if I knew the person. Your possible liabilities greatly exceed a couple of payments..

    regards,
    kyfdx

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  • chrmdomechrmdome Posts: 107
    Greetings:

    Please see my last post in regards to " short hairs ". Just another example of the lows of leasing. I'm sorry for the guy not being able to keep the Porsche, BUMMER! Trusting someone who uses your leased car with the liabilty being yours totally is fool-hardy at best, financial damaging in reality. Sell the car and take the financial knock. Good luck!

    Chromedome
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    You're very welcome, habitat1. Given Porsche's lack of lease support paying cash for a 911 is not a bad idea.

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  • rr4mywiferr4mywife Posts: 53
    Thank you all for the responses.

    Just to update you, I've decided to keep the car. Both the financial implications and the fact that Porsche rejected 3 candidates has made me think twice about parting with the car.

    I even put 4 brand new Michelin's on yesterday.

    Thanks
  • psmdpsmd Posts: 15
    I think this is a dumb question but is there a 2007 turbo cabriolet?
    If so what are the money factors and residuals at 15K and 20K miles? for 36m and 48month leases? (for both the turbo and a C4S Cab)
    Thanks in advance.
    Paul
  • vwguild1vwguild1 Posts: 98
    Paul, there is no 2007 911 Turbo Cab, but there will be a 2008...Launch will be in September, but orders are being taken now...
  • egold1egold1 Posts: 9
    carman,
    Can you tell me what the current money factor is for 36mos/12k mile lease. Also for purchase with top tier credit what interest rates are for 60mos loan?

    Is there any benefit to waiting till 08 model comes out to get discount on leftover 07 turbo?

    Thanks
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    You're very welcome, rr4mywife. At least you're keeping a great car. I'm always amazed by how much of a difference new tires make. Enjoy :) .

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