Financing vs Lease

[TRP]

Admins please move if this is the wrong place to post this. Thanks.

I am considering a Macan 4S and trying to decide if financing or a lease is the better option. I really do not understand how leases work. In the past I have lived remotely where the mileage restrictions did not work in my favor. Now, it may be the way to go.

Current car is a 2021 Mach E Premium AWD with over 103k miles (see what I mean).

Can someone explain how a lease works? I've looked on the Porsche site and looks like they are asking for $8-10k down on a lease. Is that normal? Can that be negotiated?

Anyway, sorry for my ignorance.......

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[ColdCase]

There are a couple long threads on leasing and comparing the terms vs a cash buy.

Talking about Porsche leasing, your down payment is based on car value (what you are going to pay the dealer) and term., Your monthly payment is based on current interest rates for your credit score and term.. You make monthly payments for the term you select and turn in your car at the end. If you are not buying another Porsche, there will be a disposition fee, currently about $600. Then you pay for damage. Otherwise you can purchase the car for the residual value as was set when you sign the paperwork.

Its similar to financing except you can walk away from the car at the end of the term. Financing you have to disposition it on your own and based on current market.

Cost wise depends a lot on your current situation (down payment) and interest rates.

 

[TRP]

There are a couple long threads on leasing and comparing the terms vs a cash buy.

Talking about Porsche leasing, your down payment is based on car value (what you are going to pay the dealer) and term., Your monthly payment is based on current interest rates for your credit score and term.. You make monthly payments for the term you select and turn in your car at the end. If you are not buying another Porsche, there will be a disposition fee, currently about $600. Then you pay for damage. Otherwise you can purchase the car for the residual value as was set when you sign the paperwork.

Its similar to financing except you can walk away from the car at the end of the term. Financing you have to disposition it on your own and based on current market.

I used to think a lease afforded a cheaper monthly payment as well. Looking at Porsches site, the monthly numbers are much closer than I would have expected

 

[tmrqs]

@TRP - is cash purchase an option or is it strictly lease or finance?

 

[dgkhn]

Look here (maybe TLDR from your point of view): Leasing a Porsche EV (January 2025)

Also, I believe not covered there: a down payment is typically not required, nor desirable in most cases. Leases are often quoted with down payments to make the monthly payment seem more digestible, but your dealer should be happy to quote you with a smaller or no down payment (though you typically, at a minimum, have to make the first month payment upfront).

 

[TRP]

@TRP - is cash purchase an option or is it strictly lease or finance?

Unfortunately finance or lease are my options. I am able to put a sizable down payment but not the full amount.

 

[FLHusky]

I believe the base mileage assumption is 10,000 per year. If you anticipate higher, the lease payment will be adjusted accordingly

 

[Zonie4S]

One other point to consider (covered in the linked threads) is with a lease you get a $7500 rebate. This is not available with the financing option.

 

[seabird]

One other point to consider (covered in the linked threads) is with a lease you get a $7500 rebate. This is not available with the financing option.

It's also false economy with Porsche. The $7500 savings gets eaten up by higher money factor, leasing fees, and fairly conservative residual calculations to the point that the monthly payment, even with $7500 off over 36-39 months, is only about $100 less compared to a 60-72 month loan.

The reasons to lease a car are actually very straightforward:

1. Business expense writeoff
2. You only keep cars 2-4 years on average and want to avoid negative equity at trade-in time
3. You want to keep the car for 8+ years and various incentives add up to a lower total cost compared to financing.

Only the last one takes some fairly simple math to work out. You're looking at whether the total interest payments over your loan term are more or less than the leasing sum of (rent charges + payoff loan interest - additional rebates/incentives - interest earned on down payment cash).

 

[tmrqs]

It's also false economy with Porsche. The $7500 savings gets eaten up by higher money factor, leasing fees, and fairly conservative residual calculations to the point that the monthly payment, even with $7500 off over 36-39 months, is only about $100 less compared to a 60-72 month loan.

The reasons to lease a car are actually very straightforward:

1. Business expense writeoff
2. You only keep cars 2-4 years on average and want to avoid negative equity at trade-in time
3. You want to keep the car for 8+ years and various incentives add up to a lower total cost compared to financing.

Only the last one takes some fairly simple math to work out. You're looking at whether the total interest payments over your loan term are more or less than the leasing sum of (rent charges + payoff loan interest - additional rebates/incentives - interest earned on down payment cash).

You forgot one reason to lease: you can afford to buy the car cash (no finance) and lease it just to get the $7.5K credit.

By paying off the lease within 3 months, one nets savings of right around $4.5-5k versus a straight purchase.

Clock is ticking on this though…

 

[seabird]

You forgot one reason to lease: you can afford to buy the car cash (no finance) and lease it just to get the $7.5K credit.

By paying off the lease within 3 months, one nets savings of right around $4.5-5k versus a straight purchase.

Clock is ticking on this though…

That falls under #3, but yes, you can effectively split the EV credit with Porsche that way.

 

[Zonie4S]

Since I brought up the $7500 rebate in this thread let me share my experience. I apologize in advance for sidetracking things since the OP is not able to do this.

First, all the points given above about leasing vs. financing are valid. I was planning to purchase the car as I could not write the payments off. I love the car and can see me with it for many years. Given Porsche’s money factor is so high the only way to make doing this worthwhile is to buy the lease out at the end of the first month. I was transparent with the dealer and PFS, neither had an issue with me doing this so I did it. In the end, I probably captured about $5k-$6k of the rebate.

 

[cottony]

Since I brought up the $7500 rebate in this thread let me share my experience. I apologize in advance for sidetracking things since the OP is not able to do this.

First, all the points given above about leasing vs. financing are valid. I was planning to purchase the car as I could not write the payments off. I love the car and can see me with it for many years. Given Porsche’s money factor is so high the only way to make doing this worthwhile is to buy the lease out at the end of the first month. I was transparent with the dealer and PFS, neither had an issue with me doing this so I did it. In the end, I probably captured about $5k-$6k of the rebate.

nice, im surprised your dealer didn't care. mine straight up lied to me and seems like most users have reported some form of dealer shadiness on this topic.

"if you buy out the lease in the first year, you will have to pay back the $7500 credit"
"oh really, where does it say that in the contract"
"it's not written in the contract, but you will receive a letter in the mail"
"oh ok got it "

im still waiting for that letter

 

[ColdCase]

Yeah, you loose the origination fee up front, $1400 on my $100,000 Macan if I recall correctly. Which leaves about $6000 saved. It costs about $450 a month in "rental" l fees on a 12 month one pay lease. The numbers worked out that you break even at month 10 or so. Waiting a couple months to make sure you don't have a lemon costs maybe $900.

 

[Zonie4S]

Yeah. I was concerned given some of the posts on this forum and was surprised when they did not hesitate saying it was ok. Perhaps smaller dealers are impacted more given financing is a profit center.

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