2023 GTS refinance or switch over to lease

[raffi]

Hello all, wonder if anyone else here has found themselves in same position. I was one of the "lucky" people who was able to order a GTS at msrp 3y ago when times were very different. Im now paying 2900/month to finance the car, the car MSRP'd around 160K and I owe 114K, 44mo left and the apr is 6.9%.
Im trying to figure out how to lower payments or cut losses so I have reached out to credit unions and Porsche for options.
So far what I have come up with is a refi at 5.4% APR for 72 mo, I know its not the greatest idea to pay 28mo more in interest but at least i pay 1K less/month til I come up with better plan or the gap on what I owe and what car is worth improves.
The other option given to me by porsche dealer was the lease the car for 24mo at 2700/month with 72.3K residual or 39mo at 2200/month with 61.3k residual.

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[jmebid]

Refinance and keep it! Even after it’s paid for, it’ll still be worth something versus throwing your money at that crazy lease! PLUS… I have yet to see a red GTS and I live in the greater Los Angeles area and cover a lot of miles everyday with work (not in the TAYCAN)!

 

[whitex]

@raffi. Based on what you're telling us, the situation is relatively straightforward and can be broken down into 2 problems:

1. You are upside-down (you owe more than the car is worth) on a car. You likely owe $40K+ debt for the pleasure of driving your car to date. Another way to put it, if you traded your car in today, you'd still owe over $40K
2. You are financing it at a higher interest rate than you can get today

I assume your goals are:

1. Pay off the $40K+ depreciation debt. You can finance the $40K+ separately from your car (line of credit, personal loan), or you can melt that debt into whatever car you will be paying off over the next few years.
2. Have a car to drive for the next few years
3. Save as much money as possible

Only you can decide what you can afford to pay every month. This will determine what car can you afford to be paying off while paying off the depreciation debt, and how much it will cost you to service all this debt (both interest rate and the duration/how many monthly payments).

I was in a similar situation once, it was actually with a Porsche too - a two year old 2001 911C4. My situation was that I just started a family and 911 was not working for us, but I was upside down on it. I ended up trading the 911 for two VW Passats, which had a promo rate of 0% interest (911 was at 5% or higher). The depreciation amount (the money I was upside down on the car) was split between the 2 VW loans at 0%, as I negotiated a good price below MSRP (helped that I was buying 2 together, and one of them was a W8 the dealer hasn't been able to move for a while), had my wife's old car as a trade-in, and then I took 110% MSRP loan on both (and maxed out the loan durations to 60 months, but that was primarily because the loans were at 0%).

So if your main goal is to save money, refinance at lower rate. If you also need to lower the payment because you can no longer afford it, consider a longer loan, but if you cannot afford even that, consider a cheaper car, finance as much of your Taycan depreciation in that loan, and the balance via a separate personal loan. Keep in mind that whatever car you choose to drive for the next little while, even the Taycan you have now, will continue to depreciate. A cheaper car could depreciate less than your Taycan will, so it could save you money.

 

[Skyhawk_Delta]

She's a real beauty. If you choose not to keep it, you're going to make someone else really REALLY happy! If you can afford it, refi and lengthen the loan to cut down on your monthly. If you hit the lotto you can always pay it back sooner and get out from the extra interest payments on the extended loan.

 

[jmebid]

Hello all, wonder if anyone else here has found themselves in same position. I was one of the "lucky" people who was able to order a GTS at msrp 3y ago when times were very different. Im now paying 2900/month to finance the car, the car MSRP'd around 160K and I owe 114K, 44mo left and the apr is 6.9%.
Im trying to figure out how to lower payments or cut losses so I have reached out to credit unions and Porsche for options.
So far what I have come up with is a refi at 5.4% APR for 72 mo, I know its not the greatest idea to pay 28mo more in interest but at least i pay 1K less/month til I come up with better plan or the gap on what I owe and what car is worth improves.
The other option given to me by porsche dealer was the lease the car for 24mo at 2700/month with 72.3K residual or 39mo at 2200/month with 61.3k residual.

She's a real beauty. If you choose not to keep it, you're going to make someone else really REALLY happy! If you can afford it, refi and lengthen the loan to cut down on your monthly. If you hit the lotto you can always pay it back sooner and get out from the extra interest payments on the extended loan.

 

[raffi]

Thank you for the advice guys.
clearly the lease is a poor option now.
i will try to see if i can get a low enough apr to make the refinance worth it.

 

[whitex]

When shopping for refinancing, make sure they are willing to refinance the entire balance, rather that limit you to only what they consider the market value of the car is today. Also look out for any fees associated with taking out a new loan, make sure the refi doesn't end up costing you more.

Also, what @Skyhawk_Delta said, if you're strapped for cash but decide that the forward depreciation of the Taycan is worth for driving it (i.e. you decide to keep the Taycan), take a loan at lowest interest and longest period to minimize your monthly payment, you can always pay it off early (or refi again) should your cashflow situation improve. A lot of loans also let you make extra/additional payments to help reduce the interest burden (some have a limit of how often you can make such an extra payment).

 

[moto_geek]

If you love the car. Keep it financed. It is really sad to see such depreciation going on. But I simply love driving my 2020 4S Taycan everywhere. Where you can save more on refi, ask a couple different credit unions in your area. They usually always have promotional car loan rates if you switch to them and they are usually 1% lower then the market rate and they usually wave your payments for like 2 months on them interest free for the switch and/or $500 cash into a checking account.

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