There are many advantages to leasing an exotic car verses paying cash or financing. On a purchase whether financing or paying cash all of the sales tax is paid in advance. A $300,000.00 exotic in Los Angeles would really cost $330,000.00 with tax paid up front. Ultimately the consumer or business is financing the sales tax, which can be spread out on a lease.
Tax on a lease is defined as “use tax” and is paid monthly in the flow of the lease and not all up front. Sales Tax would be an average of $273.40 per month on a 60 month lease on a $300,000.00 car. The average exotic buyer keeps a car 24 months and the cost of tax would be $6561.00, so the consumer or business would save over $23,000.00 in sales tax in the first two years.
Another advantage to the lease verses a sale is the payment. The lease payment on a 2018 Ferrari 488 for example is $2,757.28 in tier 1 with a $178,554 residual. Since the car still has value 5 years from now the consumer does not pay the principle down to zero as on a purchase.
The payment on a purchase for the same term of 60 months at the same rate would be $5,448.00. The lease payment is about 50% lower on the lease with the same down payment. In 24 months the savings of $2,691.00 per month is a total of $64,584.00. When comparing the payoffs at two years the purchase cost over $12,000 more than the lease.
A lease can also benefit business owners, as a commercial lease for business use is a business expense and not considered a personal debt. A commercial lease does not rate on the credit bureaus and the consumer does not have to list it as a personal debt. When applying for a mortgage or credit line this is a tremendous advantage for rate and or amount financed.
Many times a shopper will say I want to own the car. Simply put you do not own the car unless you have the title and most consumers never own a car. Many people get a new car every three years and never pay a car off. A closed end lease allows you to give the car back at term and get a new car.
The advantage to leasing a car is lower payment, less money down and you get a new car every few years and never have to worry about trade in or selling a car
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