What's the scoop on Ferrari Finance?

The main benefit to a lease is that you only pay tax on the amount of the lease used; in other words, taxes due are only collected on a per lease payment sort of setup.

However, if you crunch the numbers, it's effectively just like a car loan in many regards. The bottom line is you are paying someone else for their money to buy the car and you are going to pay interest for that use. There are also issues of use and insurance which tend to become more complex with a leased Ferrari.

If you can pay cash, that's usually the best bet, unless you feel strongly that you will turn the car over within a couple years for the next model. In that case, the lease might help, but even so at the end of the lease, you are still basically in the position of selling the car, in order to fulfill what the owner believes it should be worth when the lease is over.

It may also be a question of having or not having the money available for other activities, which can provide flexibility as long as the return helps offset the cost of using someone else's money, etc.

I think the Ferrari lease is very good... Very good for Ferrari

Ray

 

Pay cash. Leasing is typically not a prudent financial decision.

 

Pay cash if you are keeping; I lost out by getting out of the car faster than I thought; if you like to move in and out of cars 16-18 months or less you are better off leasing

 

I just leased my 4th brand new Ferrari. Ferrari Financial is not the best interest rate or residual, but they are the easiest to do business with. I applied at 2 other exotic lease companies and they both gave me a hard time with a million questions and a minimum of a $50k minimum cap reduction. Ferrari had me approved with zero down in 10 minutes. (BTW, I an 800 Fica score and plenty of cash flow and assets)

Why lease, simple. Easier on cash flow. My money earns me considerably more than 5% invested. And I flip my cars often and appreciate the sales tax savings.

 

Also depends on the state you are in...for different tax advantages

 

True

 

I agree with Arnie and Dolceexte. In California you get no tax break for trading in a car on a new model so an outright purchase costs around 10% more with tax (around 30k). With a lease you only pay the tax on the payments not the whole car. When I lived there I leased my exotics. However in Washington state you only have to pay tax on the difference between your trade in and the new car. Thus I don't find it worth paying interest on a lease and therefore pay cash. The only thing is that the finance rate for exotics is HIGH. 8% is crazy in the this market. You can lease a $250,000 AMG for around 1.7%. Of course MB is a monster compared to Ferrari.

 

FFS is 6.9%, non negotiable. Alternatives like Putman are at 5%. No matter what, you pay a premium for an exotic lease, but at least in my case, I get much stronger returns on my investments making it a moot point. 😀

 

Also, depends where you live. In Canada, we store our Ferraris for the winter, so in a lease, do you want to pay to stare at your car in the Garage?

 

Why doesn't Ferrari Financial offer closed end leases that protect customers from market fluctuations, bad car fax reports and body style changes? We do 2 year Mercedes-Benz leases at all times and we would get killed if we had open ended leases or bought and sold for real. I like the sales tax savings of leases as you only pay for what you use. Mercedes money factors are great too unless AMG.


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For 2 reasons that are counter intuitive. They don't want to take any risk whatsoever, and based on the way they set their residuals, no one would ever turn the car in at the end. They'de be giving away a nice bit of equity.

 

Looks like you are buying the car. Wouldn't lease but why not finance. Just bought our first Ferrari, options were cash purchase or finance for 2.9%. Getting significantly better yield in the market so we elected to finance. Simply free money.

 

1. Switch to a different stockbroker and take out a margin loan to buy the car. There are a few brokers that offer low margin rates of around 1.5% or less. I am paying 1%

2. If you don't like that idea, try this one...Pay mostly cash, but take out a very small conventional car loan. If you have young adult children, put them on the car loan too. It juices their credit score when you make your timely payments, even though they really no involvement with the loan. I took out a tiny $20K car loan when I bought my Maserati, just for this reason only. Now, my 2 kids that are on that loan with me, who just graduated college a few years ago, already have a credit score of 800. Works like a charm!

 

I like #2!
How old do kids have to be to be on the car loan? 16?

 

Different state by state but 18 is a good rule as they must be able to enter into a legally binding contract.

 

Yes, 18 is usually the rule, and my Maserati dealer in Philadelphia told me I could only put a maximum of two kids on the loan with me.

So, when I buy my next car, a Ferrari, (I hope!), I will put my other two kids on that tiny loan and...juice their credit scores too!

Also, try to make sure the kids are on the loan, but not the title. If not, then it makes it harder to dispose of the car if your kids now have jobs and live in different states and then they have to get a power of attorney form sent to you to sign over the title if their name is on it.