Want to get behind the wheels of your dream Porsche? Well, financing or leasing are both great options to help you finally drive away with a Porsche car or SUV. Learn about the specific pros and cons of financing vs leasing a vehicle before you sign on the dotted line.
Financing a Porsche at Porsche Minneapolis
Financing a Porsche is a great option if you want to own your Porsche, or want to put unrestricted mileage on your luxury car or SUV. By financing, you are spreading out the full asking price of your Porsche vehicle over a longer period of time by borrowing the money you need from a lender. In this case, Porsche Financial Services helps you finance your model at a highly competitive rate and build equity as you go.
Pros of Financing a Car
- Full Ownership of the Vehicle – The title of the vehicle is held by the dealership until the loan is paid off. As you pay off your loan, you build equity and eventually you will fully own your vehicle. Afterwards you can sell that car for a profit, trade it in, or make modifications. The vehicle is completely yours now!
- Build Equity on the Vehicle – Equity is the portion of the vehicle that you own outright. As you continue to make payments, you accrue more equity, that is the total value of the car minus the amount that you still owe to your lender. You can use your vehicle’s equity to get another auto loan on your current vehicle and using the cash from its equity to pay for another expense such as credit card expenses, medical bills, or student loan.
- No Excess Depreciation or Mileage Fees – When you finance a Porsche you are free to rack up the mileage without worrying about restrictions or penalties, unlike when you lease. In addition, you will not be responsible for any additional wear or tear in the way you would when leasing a vehicle.
Cons of Financing a Car
- High Monthly Payment – Financing typically has a higher monthly payment compared to leasing. This is because interest and other loan costs add to the total value of your vehicle. Your final monthly payment depends on the loan amount, the annual percentage rate, and loan term.
- Equity May Not Reflect Depreciation – A long-term car loan coupled with depreciation of your vehicle can lead to negative equity. Negative equity is when you owe more on your car loan then the actual value of the vehicle. This becomes a problem when you want to sell or trade in your vehicle. A Porsche will always have solid resale value after the loan is paid off, but this is a very important aspect of financing to consider.
- First Year Payments go towards Interest – The first year of your car payments are used to cover a big portion of interest. This is how amortization works. In this way paying off a car loan is similar to paying off a mortgage. As you progressively make your monthly payments, your lender will use a greater percentage to reduce your loan balance.
Leasing a Porsche at Porsche Minneapolis
Porsche’s Preferred Leasing Program helps your dream of driving a Porsche come true. The program offers flexible, attractive terms and reasonable monthly payments on new and pre-owned Porsche models. Leasing can be a great alternative to traditional financing. Let’s learn the pros and cons to see if leasing a Porsche is right for you:
Pros of Leasing a Car
- Minimal Initial Cash Outlay – No security deposit and a minimal down payment will help get you behind your dream car through the Porsche Preferred Lease program. While making a larger down payment will help reduce your monthly lease payments, it won’t save you a significant amount of money compared to the overall cost of ownership during your lease. Compared to the cost of purchasing an entire car, the total cost of a lease which is essentially purchasing a portion of the car, results in negligible interest charges.
- No Hassle of Re-selling or Negotiating a Trade-in – Unlike owning a car, you will never have to go through the trouble of selling the Porsche or trading it in when you desire to purchase a new model. Instead, at the end of the lease you just return it and drive another model for the length of your new lease term.
- Fewer Repair Expenses – Even though you are responsible for regular upkeep and maintenance, your leased Porsche vehicle will be under warranty. Major mechanical failure is covered under this warranty. In addition, most new vehicles rarely ever need major repairs. As a vehicle gets older and accumulates more miles on the odometer, the chances of a major repair increase.
Cons of Leasing a Car
- No Vehicle Ownership – You must maintain your leased vehicle in excellent condition. You can not modify it any way and you can not go over the allotted annual mileage outlined in your lease. Any additional mileage you drive will cost you extra. Remember, you don’t own the car.
- Additional Leasing Costs – There are several fees you must pay at the beginning of your lease. These include acquisition fee at the start of the lease, taxers, first months payment, down payment, and more. These fees may add up to thousands of extra dollars that you’ll never recoup because you’ll never own the car.
Take the Guesswork out of Purchasing a Porsche
You will need a plan that matches your financial situation, credit standing, and driving habits. Whether you decide to lease or finance, make sure to meet with our team at Porsche Minneapolis with any questions you may have. If you’re interested in getting behind the wheels of a luxury Porsche car or SUV, our finance experts will guide you through the entire process.