When in the market for a new vehicle, the first question you may ask yourself is: “Should I lease, or should I finance my new Porsche?”
Leasing and financing are ways to get the Porsche that you want on a monthly schedule of payments, but there are several distinct differences that could affect your final decision.
The most obvious difference between leasing and financing is what happens to your Porsche once payments are completed. At the end of a lease, you can decide to buy it at its current value or drop it at the dealership, begin a new lease and drive away with another brand-new Porsche . When financing, however, every monthly payment builds equity in your Porsche and once your payments are complete it belongs to you.
When you lease, you avoid the perceived hassle of owning an aging vehicle. If you continue to lease, you can drive a new Porsche every few years with all the latest performance, tech and safety features. On the other hand, financing means once your payments are complete, you have complete ownership and you can sell your Porsche or continue driving it forever – the choice is yours.
Choosing to lease or finance may also depend on your cash flow, how you use your vehicle and what you see in your driving and lifestyle future. Leasing often requires low down payments and lower monthly payments compared to financing a vehicle with similar terms. This is because a lease accounts for depreciation – meaning you pay a percentage of what the vehicle will cost at the end of your lease rather than the entire vehicle cost. If you need more fluid access to more cash each month, leasing may be the right option for you.
Financing a vehicle usually means a longer contract, but once the vehicle is paid off, a significant portion of your monthly costs are essentially gone. That said, the need for repairs may increase as your vehicle gets older.
Another point to consider is what happens if you encounter any unexpected surprises. A leased vehicle is generally covered by a warranty period – you are “off the hook.” When financing however, it is your responsibility to address any issues once the manufacturer’s warranty expires.
How you use and treat your Porsche may also affect your decision because leasing a vehicle comes with mileage restrictions. Check your odometer to see if your driving habits are conducive to a lease. (Keep in mind 15,000 kms is the average yearly allowance on most leases.) If you find you drive substantially less, you ought to think about leasing. If you routinely cart around carpools of kids, dogs and sports equipment, a lease may not be for you as you will be charged standard wear-and-tear fees.
One more thing to consider is if you intend to create the Porsche of your dreams with aftermarket customizations. These options would violate the terms of your lease and are therefore not available.
The most important factor in your decision should be: How flexible do you need to be if your situation changes in the future? Leasing is the most convenient option if you’re only interested in driving a particular Porsche for a few years. But you need to commit to those few years because you may pay substantially if you wish to get out of the lease before the term is complete.
By financing, should your financial situation change and you’ve taken care of your vehicle, you can sell it and move on relatively painlessly. If you’re more inclined to drive a vehicle for extended years, then financing would be a better choice for you.
There are pros and cons to either option but ultimately you need to consider your situation and what is best for you, your driving habits and your life. Consider the vehicle’s potential value in the future, your monthly budget and how long you plan to drive it. For more information on leasing vs financing, contact us today.