MSRP and Lease Price on California 30

Can you rephrase your question?

 

Much depends on the money factor (equivalent interest rate) and the residual you and the dealer agree on. Right now, lease money factors are around 0.003, which is about 6.5% interest rate. In my experience, Ferrari doesn't negotiate on the prices of new cars to any discernable degree, and dealers are happy to let inventory sit until the right buyer comes along. You can get a sense of any decline in values in previous years from the listings on the DuPont Registry or similar, too.

In California, assuming you can get $4,000 off the sticker, 60 months with a $150K will be about $2700-2800/month. This does not include annual registration and insurance. That translates to about $220K total paid in the lease for the five years. To buy the car at lease end bring your total cost to $370K. I might look for a better deal with a shorter term that would allow you to trade in or trade up at the end of 36 months, or just take really good care of the car and figure you're spending about $8 per mile for the pleasure.

Last thought is that Ferrari dealers are unlike almost all others. They have a loyal clientele willing to wait months and years to get exactly the car they want; they have people walking in and just writing a check for a completely illogical & unnecessary purchase. They will want you to be a knowledgeable purchaser, and not just a tire-kicker with lots of questions, so do your homework, assume all sellers want as much as possible (while you want to pay as little as possible) and you'll be OK.

Bob H

 

I would be surprised if you could get any discount on a new 2013 california... although you maybe able to get a little extra on your trade or a better deal on the lease or free upgrades that kind of thing.. Ferrari dealers really are a different breed they have loyal customers that will buy 10 or more cars a year then keep them a couple of months and re sell them through the same dealer probably making a couple bucks on the hot cars... with them placing reorders on the day of delivery .... very different.. let us know how it works out..
Larry H

 

If that's the case, such a lease sounds like a terrible idea. Unless you absolutely have to lease it, you'd be much better financing it and just selling whenever you're ready, making up any difference in what you owe on it.

Financing rates are like 3%... can't argue with that.

 

Financing $240K over 5 years at 3% would result in having paid about $20K in interest.

If you sell it for $120K after 5 years, it would have cost you $140K.

If you lease for 5 years at $3300/mo, you'll have made about $200K in payments. If you have 50% business usage, you'd have $100K in deductions over the life of the lease. I'm assuming you're in the highest tax bracket being that you are leasing a Ferrari and that you'd be asking for an audit if you're trying to write off a lease expense that was a large portion with respect to income, so I'll assume your tax rate on the money spent on the car is something high, like 35%.

$200K - $35K = $165K

It looks like financing would be $25K cheaper even without any business related deductions, and it would be much more flexible in that you can do whatever you want to it and sell it at any time.

The price you sell at, your business usage %, and tax rate would change the effectiveness of each option. I'm not sure how sales tax works with leases. I don't really know how realistic that situation is, but that sounds to make like a best-case leasing scenario with respect to taxes.

I've never even considered trying to write-off an exotic car, so maybe I'm totally missing something here.

In any case, financing is the better option given the flexibility and potential savings. I do however think a California 5 years from now at $120K is wishful thinking, especially with 30K miles. Can see them closer to $100K by then.

 

Yes, and if you want to spend time with your friends at the IRS, go ahead and claim a Ferrari as a business vehicle. You can do so, but really want to have a precise understanding of the requirements and conditions of the business use (beyond just claiming a mileage deduction for miles driven in the course of business).

In gross terms, vehicles that are clearly marked with the business logo or similar get to the threshold of being a "business vehicle" versus those that are just transportation cars.

If I were considering this, I'd sit down with my tax person/attorney and run through the rules. Re lease "sales tax" it is apportioned over the life of the lease for the value of the vehicle used in that proportionate time. Less expensive than paying sales tax up front, and less total tax paid since you don't pay tax on the residual.

As said, there are nuances you should explore before putting money down in either direction. Bob H

 

Which dealers have brand new Cali's sitting on the lot?!?

Serious question...I've only seen one and it was a customers ordered car that the customer didn't take when it arrived. I have not heard of US dealers ordering Cali's for inventory?


Sent from my iPhone using Tapatalk

 

I found a couple with 200-300 miles but no brand new ones.

 

I would be careful claiming the lease of a ferrari as a business vehicle ., unless perhaps you are somehow in the exotic car business .. it would be asking for trouble, plus i think there is a limit (could be wrong ) on the deductible lease value of the car. I think the advice of asking your accountant would be very wise. If audited it just does not work to your advantage and likely will cause the agent to look very hard at other items.. just saying..
LarryH

 

My buddy just bought a California on eBay and the dealer offered him a 1.49 apr on 75 months via a credit union in texas. At 175k, it's 2500-2600$ a month, which is what he got on a 210k 2012 used. If you ebay Ferrari California, you'll see several dealers advertising it.

I'll ask him and post the CU he signed up with.

 

An informed and valuable discussion: I have just this to add. Leases are somewhat advantageous strictly on sales taxes because you only pay tax on the delta between the sale price and the residual vs a purchase where you pay sales tax on the total purchase price. Obviously this makes no difference in a state with no sales tax like Oregon but a huge diff next door in Cali where sales taxes can approach 10%. That said I think you have to run ALL the numbers to determine the cheapest alternative.

 

But on the other end, when you purchase. you get trade-in value for your purchase of your next car, cutting down on the sales tax on your next car. There is no free lunch.

 

You are partially correct: as with sales tax, it depends on the state. In Texas, yes, in California, no.

 

my preference is to have the business establish a car allowance which then can be used to offset the costs of owning any car whether Ferrari or not... your accountant and legal advisor can set the max parameters that will work for your personal situation... all that appears on the books is a car allowance that is supported by the financials and the liberties that you can take with your business...

cost of personal ownership / operating expense is reduced by the amount of car allowance...

 

Keep in mind that a "car allowance" in contrast to a "reimbursement" for expenses incurred pursuant to an "accountable plan" is includible in income which can be offset by the actual expenses incurred by the employee if they meet the definition of an ordinary and necessary employee business expense.

 

and in Virginia they do not allow you to reduce the sales price by the value of the trade in.. for tax purposes nor do they allow you to lease on part of the purchase price ;sales tax is on the entire sales price.. of course it is 3% so not as bad as some ..

 

In CT we pay 6.35% sales tax on each lease payment actually made. The upside is you only pay sales tax for the months you actually have the car. The downside is that you pay sales tax on interest (the money factor) and we have car tax (paid to the town not the state) which can be thousands of dollars per year (some towns are worse than others). The bright side of that is car tax makes the home taxes lower (all car owners pay it even if they do not own a home) and goes down every year as cars depreciate. I lease new Mercedes all the time and always get out 4-6 months early due to factory pull ahead programs so I wind up saving the sales tax on those months I don't have the car. Yes, I wind up paying sales tax on the new car's payment but I don't get double hit.

Correct me if I'm wrong but if someone did an open ended third party lease on a Cali with some money down and if they only kept it a few months they would only pay a small amount of sales tax in state like CT that only taxes the monthly payments?