I'm currently looking at an '07 TT with a sticker of approx. 119K. Obviously would like to get that down.

Seller is offering multiple options including an open ended lease or up to 144 month financing. Financing and leasing interest rates are both around 7.7%. I have currently have an 02 C2 that I own outright and will sell to get part of the downpayment. S/B worth around 30-35K.

I've never considered an open ended lease and from what I've read it doesn't sound very appealing especially with a quoted residual in the mid 40K range after 48 months. Seems low but that's what leasecompare also showed for a similarly priced car. I would think that the FMV of this particular car would be higher in 4 years but if the price of gas goes through the roof you never know.

The other option is to finance it over 10/12 years. With the amount of money down I should not have to worry about being underwater on the loan unless the bottom drops out of the market. I don't think I'd ever plan on keeping the car that long - more likely in 5 years I'd like to get another one.

I am not a business owner so there is not advantage to leasing. Would love to keep the payments around 1,500 per month. Is this doable? To me it makes sense to finance the car for a long period of time and sell it half way through if I'd like another one.

What am I missing?

Thanks,

 

go buy a nice piece of land

 

This would be just my humble opinion...
1)-Leasing:
I would say this would be your best option provided you are able to write it off as a buisness expense...If it's an open ended lease then you can always buy it and sell it off or simply walk away from it and buy another car per your plans ...
2)-Financing :
Just remember banks are going to take 70% of their finance charges in first 5-6 years ...I would say you probably be paying close to $30,000 to $40,000 in interests in 5 years depending on your down payment..
So lets do some maths....

Leasing:
What ever your payments would be,you will be able to write most of it off through your buisness which is pretty good...
Financing:
$119,000 + $30,000 interests in 5 years = $149,000
Value of the car in 5 years = $75,000
Money lost $79,000

If i was you i would rather not finance any car for more then 3 years...

 

Wallmon.....um.....thanks?

Quick - thanks for the info. I think your interest numbers are a little high but I can check them easily enough. I am NOT a business owner so I can not deduct the lease payments.

 

I wouldn't finance anything for 144 months unless it has a backyard. Seriously, the leasing numbers on a used car are never as good as a new one. I think if you trade yours in on a new tt, you can be at or below 1500/mo. I would not lease a used car, only new, and I always run those thru my biz. Check with your accountant, may besome leasing advantages even though yoy don't own your own biz.
Basically with leasing, you will always have a lower monthly vs financing on a new car. Plus, you can always just walk away when it's over.

 

Neither. I can point out why each choice is a financial disaster .
Even buying the car outright is not a cheap endeavor but to to finance it long term makes the move a money pit . Factoring in the cost of repairs and maintenance while you are still paying this 10 years from now ??? Eeesh .
Leasing it is even worse because after you shell out all that money and end up fixing THEIR car after warranty ends --you have NOTHING .

IMO --you are in over your head if yoir numbers sound appealing . As much as I love my car --it's not worth what you are describing.

 

i calculated the numbers. after 5 years on a 12 year loan you will still owe about $70,000, based upon a $100,000 original loan amount. the car may be worth $50,000 or so. obviously, you would be way underwater. you need to purchase a car you can afford. i am saying this as a certified financial planner. good luck.

 

Thanks for all of your advice. I guess I should clarify things just a bit. It's not so much about affording the payments - we're not what I'd consider rich (income roughly twice what democrats consider "wealthy") but we could easily handle monthly payments far in excess of what I was originally considering. I guess I was just being a little unrealistic about my monthly payment. I guess I should have aimed a little higher. All three of the cars we have currently are either paid off or have a couple of months to go. The total of all three payments are about 1,500 per month so I was using that as a guideline.

Time to get more financing options from the dealer.

I think its more a psychological thing - our mortgage is small having bought our home 10 years ago and the thought of spending more per month on a car than I do a mortgage is something I never thought I'd do.

 

Seeing as how Im leasing one thing to consider is how many miles you are going to put on the car.

I got my lease with 18,000 per year and I will be in excess of that each year I have the car (Im at 17,500 miles since Feb 26th). I also track the car and dont baby it.

By the time my lease is done the car will have around 75,000 miles on it and will not be worth the residual that the lease is structured with and I will just give it back to the dealership.

Factoring in the price of the car new, vs how much I would get for it if I sold it, had I bought it, I will be down (over paying) about $5,000-10,000, broken down over 36 months that's about $208/mo that Im paying extra. But I get the benefits that I dont have to shell out a bunch for the car, tax write-offs (moderate), and I dont have to worry about selling the car, or caring about every little nick that the car gets.

More importantly I have the biggest smile on my face for the next 36 months.

I think leasing works, if you DRIVE it, like you stole it, or at least track it every weekend

 

Seller came back with 5.7% over 5 years.

The car lists for 119K - I think I can get it a little cheaper than that. Assuming 115K with 35K down payments would be about 1650/mo. Seems like the better way to go.

No backyard, but hey I've always wanted one.

 

i just keep buying i get too roll my tax credit over just worked out best for me , have allot of friends who do closed end lease and love it

 

If anyone is even considering financing a car 144 months, probably shouldnt buy one... I am not saying anything derogatory.. When I was younger, in my 20s, I financed a car for 72 months,, I wanted that car so bad but couldnt really afford four year financing..Now I look back, that was such a waste. Wait till you can afford three year financing..Just a little advice from a guy who has been there.

 

^ Ditto, the first car I bought myself was a ford escort 199/mo for 5 yrs, I was dirt poor at the time, barely made those payments. When the 5 yrs was done, the car was worthless and I probably waaayyy overpaid for that POS.
Been there, done that, got the t shirt, don't want another.

 

Leasing pre-owned cars just isn't a good idea. 60 month term is the only way to go. You can possibly make a 72 month term seem attractive based off your down payment but your end result will be more money out of your pocket during the course of ownership. If your interested I have two 07 TT's available that would be in your price range.
rjennings@hennessyporsche.com

 

One suggestion is wait another year or so when 2007 prices hover below 100k.