Hello all,

My lease is up in a few months and I'm pretty sure I'm not getting into a 991.2. I want some more financial flexibility in the next year or so as I'm planning a significant career shift.

I really don't like financing cars unless you ultimately payoff the loan. Trade ins are an opportunity for dealers rake you over the coals and private sales aren't much better. I love leasing and I'm currently self-employed so I get a great write off.

Going forward I have the following questions:

1. Has anyone ever negotiated a buyout with PFS? Some companies categorically refuse to negotiate.

2. If I buy off lease, I plan on keeping it a while (5+ more years) However, the whole motivation for the buyout is to keep the monthly obligation down. A 60 or 72 month loan with little down I'm guessing will put me upside down for a few years which negates the financial flexibility I mentioned earlier if I decide/need to sell the car. I know there are variables like mileage and interest rates, but in general is there a loan term with an optimal break even equity point?

3. Lastly, I'm also considering 1) requesting a lease extension or one year re-lease to re-evaluate in that time; or 2) putting down some money and financing a new 991.2 with the maximum term - I believe its 84 months. The latter prob. isn't a great option since a sizable downpayment on a buyout would perhaps remedy the negative equity concern.

Any thoughts are greatly appreciated.

Thanks
DRP

 

In my experience, Porsche will not negotiate at all on the residual buyout (my dealer claims that they have "residual insurance" so they are covered on market value losses upon lease return, not sure if that's true). When my lease was up, I had essentially no choice but to turn it in as the residual was way above fair market value. I did request and was granted a 3 month lease extension, but I'm not sure they will extend it longer than that unless you have a new Pcar on order.

 

PFS allows you to extend your current lease for 6 months at the same terms/payment. If you have a car on order at the end of your 6 month extension, you can extend your lease again until the new car arrives, assuming it will be under another 6 months. In my case, I extended for the initial 6 months, then extended for another 3 months until my new P-car arrives. They will only extend the additional 3 months if you provide them with the order # from your sales rep.

 

You did not mention milage, condition, etc of your current car. If that is low and good, I would not take another depreciation hit on a new one. My wife leased a Mercedes a few years back and when the 3yr lease was up I faced a similar decision. Her car had 10K miles on it and was in perfect condition. I just bought it and it's now my daily driver. I needed a new DD and my view was why take another huge depreciation hit on a new car when I had a car that was almost new.

In terms of the financing question interest rates are very low but they do go up as the term does. I'd look for the balance between term and interest payments and decide what you like. For example I have a 2.25% deal on my wife's car; I earn much more than that with my investments. On the other hand I looked into financing my GT3 and the longer terms came with a 4% interest rate. I did not like that and ended up doing a shorter term at under 3% which I can get comfortable with.

In terms of your comment that you would be upside down for the early part of the loan, who cares? If you decide to sell the car you can just cough up the cash then instead of doing it going in. If you like the car, and really plan on keeping it for several years, then I'd do that. That assumes you have the cash reserves to close the "upside down" gap if you decide to sell it in a year.

Good luck.

 

You need to tumble the numbers to figure out what is the monthly costs and what fits for you.
The best rule of thumb is finance in accordance with how you are going to use the car. If you want to keep it several years than finance to own it. If you want flexibility to get another car than release it.
Financing terms should not determine what to do but should reflect what you want to do with the car

 

It sounds like you really want to keep your car or a new Porsche but want to maintain your financial flexibility in case your uncertain circumstances turn for the worse.

I understand that decision from an emotional perspective, but rationally, strictly from a financial POV, you shouldn't do it. Wait until your situation is clearer. Porsche ain't going anywhere.

84 months may seem appealing due to lower payments but ultimately you're paying considerably more to borrow that money and in all likelihood, are you going to stay with a car for SEVEN years when new, exciting variations come out every year or so? Then you trade it in and you're REALLY upside down due to the lower payments.

If you're intent on keeping a Pcar because you just don't know what you'd do without one, I would advise you to get a CPO 911. Even 2013s are visually indistinguishable from the 15+ and will probably give you 95% (conservative estimate ) of the same enjoyment for a lot less. You maintain more flexibility, won't be on the hook for as much dough, and probably less upside down due to depreciation slowing.


Just an idea. But definitely don't put your future at risk if that's what you're worried about. Not worth it. Debt sinks even the wealthiest.

 

If that's the case, then truly you need to get out of something as expensive as a Porsche and something more reasonable, practical and easier to sell should the need arise. I'm thinking a slightly used CPO (2-3 year old) BMW or Mercedes. If you really want flexibility, buy something less expensive, like a Honda Accord. You know, if you don't enjoy driving...

 

There were some excellent responses, yours included. And everyone's situation is different. I'm a car fanatic. My car isn't an accessory or status marker to me. Its a car, the best one I've ever had.

As I mentioned originally, I -want- flexibility. I don't strictly need it as of right now. I'm looking to switch from self-employment to a likely lower income position in the same field on a W-2. How much of a step down is uncertain and the income will certainly eventually catch back up. To put things into perspective, I haven't even started interviewing yet. But I wrote this post b/c my lease is up this month.

What I'm looking to avoid is taking a position in the next year or 2, and at that point having to ride out 12+ months of a lease on a new 911 that is slightly disproportionate with my income. That's what I mean by flexibility.

I have 3 cars now (2 leases). One lease is up in Sept. and I'm not going to replace it. I'm going to 2 cars, so I'm making concessions regardless of what I do with the 911.

The debate was whether to buyout my 4 year old carrera with 44k miles on it using a 5 yr. loan and be out of warranty summer of 2018, or lease a new carrera for 27-30 months. There is a 12 month pull ahead to get out of any 911 lease into another porsche (cayman or base cayenne etc.) I'm crunching this info. in connection with the fact that its $10k+ over residual to buy my car! (taxes, cost of warranty, dealer's profit and any work to the car)

So, now I'm more inclined to enter a short term lease on a new 911 than when I wrote this post.

The only question that is keeping me up at night is...what happens after that lease is up...? If I buy now, I'll have a carrera then. For sure, I will never buy a 911 off a short term lease. So if I'm not in a position to lease a new 911 in 2-3 year it could be game over for a bit? - I'm a lawyer not an entrepreneur so I always base my game plan on worst-case-scenario.

It seemed like the buyout was the conservative way to go, but it's not so smart to be financing an out of warranty porsche - right?

Any further thoughts.

BTW, buying a CPO BMW, or the like, isn't an option. It's the same as buying my car off lease effectively. If I wanted to go 100% conservative, I'd buy an inexpensive CPO hybrid and take a sabbatical from driving - as my track driving skills dull

Thanks
DRP

 

I think turning in your car and leasing a new 911 is probably what I'd do. If you take a position at the government, firm, or Inhouse, lease trader or swap-as-lease might be able to help you ditch the lease payment.

 

Done and done. I ordered a 991.2 that should be here just after thanksgiving.

I just love the 911. Its such a privilege and a joy having one. I'm very excited to see the final product when it arrives. My last two 911s I bought off the lot. A custom order is a big deal for me.

Now I have to preoccupy myself so the time passes more quickly...

Thanks for the replies. I'll post pics when it arrives.

Regards,
DRP

 

Forget my post. You leased one already. Good luck.

 

Congratulations, DR! Can't wait to hear how you compare the .2 to the .1.

ChuckJ