I would respectfully submit that those executives who fire-sold their cars didn't have $2M in the bank to weather the storm (my example). We all know plenty of folks that make $300K per year in NYC or SF or LA and live hand to mouth. These are the people who likely have no business buying a $100K+ car, no matter if they pay cash, lease, or finance a purchase.

 

In 09 the used car market had so many 997S and 997 Turbos on sale for cheap that guys bought them used and sold them a year later and in some cases made profit !!!!

In the meantime the new cars sat unsold and the production numbers were enough that too many were at the dock and still more were on the boat .

Back then someone posted in the 997 forum where he started out looking at a low interest lease and by the time he reached post #50 he found a 20 percent discount . He was not the only one . https://www.6speedonline.com/forums/...od-deal-4.html

I coudn't believe it !! Look at my reply (post 54) . I was so amazed at his deal at that time .

Times have changed . It's not that guys back then had no income or savings . It's that the comfort zone for some vanished quickly when they found themselves in the sinking equities and looked at their home values plummet . They also saw business decline . In short .. they sold the luxury items first to cover the empty hole in their investment wallet and if they financed it . then even those extra pennies mattered .

That was 2008 . But now 1.39 percent is "free" ?
Not to me . Theres a peace of mind that I feel comes with the pride of ownership .

It would always be important to me to have my name on my cars title .

 

Interesting thread. This is true about everybody having to look at their own scenario and act accordingly. I for instance would like to buy some property soon, so the bank doesn't want to see a large monthly expense (auto loan) on my credit. Therefor it's best to pay cash for the car, in my situation.

For some people the convenience of leasing outweighs the higher cost. A bit more expensive however you get the convenience that if the car gets in an accident you don't have to worry about poor resale value.

That being said, I would like to take the 'buy and hold for 6 + years' route. My only worry is being stuck with an accident report on the car should an accident happen.

If anyone has suggestions for an insurance company with a good record of paying out on diminished value let me know. If I had confidence that the insurance would pay out if I got rear ended, repairs and diminished value, I would feel better about owning.

Regarding wheel insurance, not to say anything bad about women who drive SUV's but I have a feeling 911 owners may be a bit more OCD about their wheels and avoiding curb rash. I know I definitely will be and i'm sure everyone on this board is too (although I admit sh** happens)

Nails on the other hand can be spontaneous and unavoidable. Depends where you drive and if it's a problem. Around the industrial park that I frequent they're littered everywhere, I get good karma by picking them up and throwing them away. Still, they find their way into my tires and it's a sad thing, so I may get the wheel insurance since that's my situation.

 

Hi yrralis1,
i agree with your last post - it's often about emotional sentiment. I know some guys who feel poor because their net worth went down from $15M to $10M in a market crash, so they start selling stuff that's non-essential. Luckily i don't have that problem

This just further illustrates my point that to each his own. I know some guys who spend 50% of their time working in India. Risk-free rate of return is 8%. So they're happy to take their US savings, invest it in India, and capture the spread. Would I do that? Hell no. So i therefore don't consider myself has having access to an 8% liquid, low risk investment.

If your opportunity cost for money is higher than 1.39%, and nobody can argue that there isn't a chunk of America with a cost of capital higher than 1.39%, then a loan for that rate may be a great deal.

 

Even a painted scratched panel places a diminished value on a high end car. A big wreck and accident report means fixing it properly and either keeping the car long term or taking the loss . However .. 68 thousand dollars (that 3 year lease example on the thread) actually is so high that of course dimished value seems almost like pennies in contrast. Besides if a car is leased and wrecked (but repairable) early into the term the guy now has to drive (and service) the repaired car 3 more years or pay it off at a higher rate only to sell it for a huge loss . Plus he has to make payments while it might take weeks to get fixed. That's no baragin !! My point is that no matter how one tries to hedge it any damage on an expensive car is a negative event .

Diminished value does tend to go down on an older car . For instance if someone dents a 2006 911S that he bought used for 45K it's not going to be as significant as the guy who pays 150K for a high option 991S and damages it three months after he bought it.

At least the guy who has the title in his name can make choices . He can get it fixed and keep it . He can fix it and trade it in or sell it . He's not stuck in a finance or lease contract . It's his car .

 

Much more eloquently put than I was able to accomplish.

I understand yrrallis's perspective as well. Being averse to debt rarely lands anyone in hot water. Pride of ownership has more value to some than others.

 

+1000, nothing beats the feeling of driving a car we have owned (paid off).

 

I'd like to be there when you try to explain a Porsche 991 as a company car ... lol. My accountant tells me "You can get away with a Toyota Tacoma Pickup, Truck, but not a $ 100K + Porsche". But then again, if you don't get audited, smooth sailing.....

 

Publication 463 of the IRS: Lease Inclusion--have your accountant explain

http://www.irs.gov/publications/p463/

 

The amount of depreciation these cars suffer is hard to imagine. I feel kind of stupid buying a new one if one can buy a 2-3 year old one with very low mileage for $50,000 or more less. I had no idea it was that bad.

A $68,000 pre-paid 3yr lease with 7,500 miles per year sound outrageous to me.

My 6 year old Boxster S held 62% of what I paid for it.

I am kind of surprised that the market for a used 991 isn't better.

There may be some risk if the car wasn't probably broken-in, but if it was not a demo, the risk is probably pretty small.

Just need to buy from someone who cares for it like the people on this site.

 

It still has to be used for business reasons, not personal.

If you can claim business use for a Porsche 991 and therefore write-off 100% of the lease payment, then that is yet another problem with the tax system.

I am as conservative as it gets but that would simply be wrong.

If your company wants to provide you with the car fine, it can deduct the lease payment just like any other compensation, but the value of the lease should be included in your income.

 

in my previous post, i mentioned the whole payment wasn't going to be deducted, only "some deduction".

i'm well aware of the deductions--and trappings of excess deductions-- i'm an accountant