Hey guys - I'm getting back into a 911. Yay ! I will be leasing this time. I've leases before but never a Porsche.

Anyway here are the lease terms I got and I would love a quick sanity check if you guys think it reasonable or am I getting screwed?

Seeking the collective wisdom of 6 speed before pulling the trigger tomorrow. Eeek !

Cap cost - $107,000- it's a base with a bunch of options. (I'm ok with the cap cost)
Down(pays first month and all fees/taxes) - 7,000
24 month term (I want it this short)
10,000 miles per year (this is good for me)
Residual value -74,000 (not too concerned here because I don't plan to buy it at lease end)

Monthly payment : $1,750

 

What is the MSRP ~ $123,000?

 

It's 107k + taxes, fees, ect.

I also forgot to mention that 1750 is the after tax payment, in California.

Before taxes, the monthly payment is closer to 1550

 

I guess I don't understand leasing a vehicle. You are going to spend close to $50K to lease it for 2 years then give it back.

 

Leasing makes more sense for some, depending on type of occupation and location.

 

I don't understand your lease. A lease calculator usually looks like this:

MSRP:
Negotiated Price (commonly referred to as the cap cost):
Lease Rate (% or money factor):
Trade in:
Cash Down:
State Tax:
Residual Value (at lease end):

Payment: (Calculated by the above).

The residual value of a C2 with 10,000 miles in Canada, currently is 60%. I don't know what the 24 month residual is as a percentage.

Without knowing all of the information in the above example, its difficult to comment on your deal.

 

As others have noted, we need more information to comment. The residual is set by the manufacturer and can't change (unless you buy Porsche prepaid maintenance plan, which bumps it 1%), so the ways a lease deal can get better is by making sure you are being charged the base money factor (interest rate) and the dealer discounts the vehicle. So I would need to know the money factor you are being quoted and the MSRP. Also, watch out as Porsche (unlike most manufacturers out there) sets maximum residualized MSRPs (MRMs) for their lease program. That is, each model has a maximum MSRP that can be residualized. Once you exceed this amount (which you should never, ever do), you are going to pay for all of that amount in excess of the MRM in the lease. So instead of paying for around 40% of a given option over 36 payments, you are paying for 100% of it over the same 36 payments. This can cause the lease payment to rise in a shocking fashion as every $1000 over the MRM now costs you in excess of $40/month given Porsche's terrible interest rates. That same $1000 option only cost you about $15/mo. when it is residualized as part of the lease. Never, ever exceed the MRM on a Porsche lease. I have a suspicion you are over that amount looking at your figures but I need more info.

 

Ok here's the details:

Cost - 103k
Residual - 83k
Money factor - .0025

 

Good info! I did not know this about Porsche.

Obviously you can do better on the cost. I think right now you be able to get at least 7-8% off MSRP, so your cost should be around $99k max.

Other than first month payment, taxes, and DMV fees, you should never put extra money down to reduce cap cost on a lease. So if your monthly is around 1500, drive off should be about $3k max. Looks like you have a cap reduction (aka down money) of at least 4K. If you have extra cash lying around, better to put that 4K toward MSD (multiple security deposits) if Porsche offers them, but it looks like they don't.

 

Awesome, this is helpful ! What is the multiple security deposits?

 

Most auto finance companies allow you to pay a lower interest rate (i.e. MF) if you give them a refundable deposit at the beginning of the lease. Typically one MSD equals a monthly payment of the car. Each MSD reduces the MF by a certain amount. They usually limit you to a max of 7-8 MSD. So if your monthly payment is 1500 and you want to put 5 MSD 'down', you give them $7500. In return they lower your MF by a set rate (again this is set by Porsche so dealer cannot change this). At the end of the lease company sends you back your $7500. It's that simple. Most sales guys and most people who lease cars don't know anything about MSD. So you'll need to talk to the finance guy to find out.

Advantage of MSD is a reduced interest rate. Disadvantage of MSD is the large cash up front. Also can be a headache if you decide to get rid of your lease before it ends.

Also clarify some numbers for us. You have two "cost" numbers, 107k and 103k. Which is the MSRP? And which is the the negotiated price (if you were to pay cash today)?

Next you have two residual numbers, 74 and 83, there should only be one.

Finally understand that down money does not include taxes, license, etc. So when you pay zero down, you still need to pay first month payment, taxes, license, other dmv fees before you can take the car off the lot. Down money is what you pay on top of this when you leave the dealer.

Either way, DO NOT PUT MONEY DOWN when you lease a car. If you total your car after 3 months, you loose all your money down.

Come back and keep us updated.

 

Pretty sure Porsche does not do the MSD thing.

 

A coupe of problems. First, they are raping you on the money factor. That .0025 equates to a 6% interest rate. The Porsche base rate is still super crappy at .002 (4.8%). That makes a difference. Second, your discount on the car could definitely be better. The way I am taking it, the MSRP of your car is 107K and the selling price is 103K, is that right? They should be willing to discount at least 6-7%, especially if you are buying the car off the lot.

At the end of the day, you can be at a lower number on your lease but the lease game on Porsches is never one the consumer is going to win. The upside is that you get one heck of a fantastic car so you need to adopt a pay-to-play attitude. My advice is if your credit is stellar, ask them to give you the base money factor and to discount the car another few grand.

 

Thanks I think you are correct. Porsche does not do MSD so that's a shame.

Agree on both counts. The base MF is .002 so your dealer is inflating it. Insists on getting a base MF. And as mentioned above, you should aim for at least 7-8% off msrp right now.

 

Thanks for the advice guys ! In my earlier post I only had rough numbers to work with. Now I have the contract in front of me (not signed by me yet) here's how it looks:

Gross cap cost - 105,339
Adjusted cap cost - 101,305
Residual - 73,878
Down payment - 7,000 - taxes, fees, 1st month
Monthly payment 1,700
24 months/ 10k miles per year
They didn't put the money factor on the contract but I was able to calculate it myself and it is .00240