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Dan1923

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Question for everyone here... What do you do for work? I work in business strategy consulting.
I’m retired now but I was an independent consultant for computer design, programming and also did on-site training and wrote books and published video courses on programming.

BTW there is a lot more money in technical video courses than books, even if you have a
“best seller”.
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Dan1923

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This is a little long but it’s about something I would really like to understand…

I’m curious as to how the “pay for you car while it is still on the dock” thing will work out. I hope we don’t have to do the actual experiment to find out :)

The reason I’m curious is because in my business I’ve had to deal with state tax collectors a number of times. One thing I came away with was how well these tax collectors understood the arcane details of how particular a business works to determine if that business (or individual) was on or over the line of tax avoidance.

In one case a state wanted to collect tax/penalty from me based on an audit of one of my customers. It was a tax I did not owe and neither did my business. The cost of fighting it was too much so I paid it. But it was amazing how much stuff that state had to dig into to claim I owed the taxes.

Now here is the thing I don’t understand about “pay on dock”. For this to work Porsche NA will have to invoice the dealer before they have actually shipped the car to them. I’m pretty sure that both Porsche NA and the dealer do accrual accounting. I don’t see how Porsche NA can invoice something that is not in their accounts receivable and it can’t go into accounts receivable until it’s been shipped. I don’t see why Porsche NA would change an accounting practice just to accommodate a few customers.

The one time I think “pay on dock” works is if Porsche NA invoiced the dealer once the car was put on a car transport truck because that’s the typical time that things are invoiced. But if the car has to sit around on the dock because of whatever… that’s where I don’t see how “pay on dock” works.

It may be the dealer figured out some fast and loose way to cut us a better deal that doesn’t involve Porsche NA. They might want to do this not necessarily to help us but because they want to collect as much money as the can before end of year. But this is exactly the kind of arcane business practice the tax collectors are on to and know how to detect.

When I first started my business I bought a lot of stuff out of state. Among other things it saved me sales tax, 7.5% in MA at that time. Fortunately my accountant (a CPA) warned to o pay the sales tax to MA. She had run into lots of professionals who did this end run around sales taxes but all were found out, usually years later, and ended up with big tax/penalties to pay. The tax collectors know more about how your business works than you do.

So I won’t be doing “pay on dock” if the car doesn’t make it here in time, for a couple of reasons.

I have trouble paying for a proverbial “pig in a poke”.

The second reason is that I’m confident tax collectors will catch on to what is being done. I’m not willing to roll the dice on the time I will have to spend with tax collectors to straighten things out. When I had my business my time was worth more than what I might lose by giving up the tax credit. Now that I am retired my time is worth more than anything I can imagine.
 
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Prit

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This is a little long but it’s about something I would really like to understand…

I’m curious as to how the “pay for you car while it is still on the dock” thing will work out. I hope we don’t have to do the actual experiment to find out :)

The reason I’m curious is because in my business I’ve had to deal with state tax collectors a number of times. One thing I came away with was how well these tax collectors understood the arcane details of how particular a business works to determine if that business (or individual) was on or over the line of tax avoidance.

In one case a state wanted to collect tax/penalty from me based on an audit of one of my customers. It was a tax I did not owe and neither did my business. The cost of fighting it was too much so I paid it. But it was amazing how much stuff that state had to dig into to claim I owed the taxes.

Now here is the thing I don’t understand about “pay on dock”. For this to work Porsche NA will have to invoice the dealer before they have actually shipped the car to them. I’m pretty sure that both Porsche NA and the dealer do accrual accounting. I don’t see how Porsche NA can invoice something that is not in their accounts receivable and it can’t go into accounts receivable until it’s been shipped. I don’t see why Porsche NA would change an accounting practice just to accommodate a few customers.

The one time I think “pay on dock” works is if Porsche NA invoiced the dealer once the car was put on a car transport truck because that’s the typical time that things are invoiced. But if the car has to sit around on the dock because of whatever… that’s where I don’t see how “pay on dock” works.

It may be the dealer figured out some fast and loose way to cut us a better deal that doesn’t involve Porsche NA. They might want to do this not necessarily to help us but because they want to collect as much money as the can before end of year. But this is exactly the kind of arcane business practice the tax collectors are on to and know how to detect.

When I first started my business I bought a lot of stuff out of state. Among other things it saved me sales tax, 7.5% in MA at that time. Fortunately my accountant (a CPA) warned to o pay the sales tax to MA. She had run into lots of professionals who did this end run around sales taxes but all were found out, usually years later, and ended up with big tax/penalties to pay. The tax collectors know more about how your business works than you do.

So I won’t be doing “pay on dock” if the car doesn’t make it here in time, for a couple of reasons.

I have trouble paying for a proverbial “pig in a poke”.

The second reason is that I’m confident tax collectors will catch on to what is being done. I’m not willing to roll the dice on the time I will have to spend with tax collectors to straighten things out. When I had my business my time was worth more than what I might lose by giving up the tax credit. Now that I am retired my time is worth more than anything I can imagine.

Thanks for the context on this.

My SA said a few times "we can't legally" charge you until Porsche invoices us... What I gather from that is that something must happen at the dock for Porsche to invoice the dealer, and only then can the dealer accept funds and sign paperwork. It could be when the car is scanned in and "in possession" of the dealer on their truck. In any case, it seems like the dealer is making sure they are "covered" when/if they accept payment and sign paperwork.
 

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Thanks for the context on this.

My SA said a few times "we can't legally" charge you until Porsche invoices us... What I gather from that is that something must happen at the dock for Porsche to invoice the dealer, and only then can the dealer accept funds and sign paperwork. It could be when the car is scanned in and "in possession" of the dealer on their truck. In any case, it seems like the dealer is making sure they are "covered" when/if they accept payment and sign paperwork.
My guess would be that the change of ownership occurs when cleared from port and on transporter - so it’s not the dealers to sell until that time.
 

NoRPM22

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My guess would be that the change of ownership occurs when cleared from port and on transporter - so it’s not the dealers to sell until that time.
This is my guess to. It's transfer of ownership from the co to the dealer that might occur when the car is unloaded on dock. Then it's the transfer from the dealer to us.
 


DACSarasota

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Question for everyone here... What do you do for work? I work in business strategy consulting.
I am an intellectual property (patents, trademarks, copyrights, etc.) and technology law attorney.

Business strategy consulting is something I often advise to my clients who have ideas/concepts but don't know how to execute them. We should PM offline as I may have a future need in Atlanta.
 

DACSarasota

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My guess would be that the change of ownership occurs when cleared from port and on transporter - so it’s not the dealers to sell until that time.
My SA told me this was the case. It needs to be scanned by the government at the port. Basically logged in that it has hit U.S. soil.
 
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Prit

Prit

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I am an intellectual property (patents, trademarks, copyrights, etc.) and technology law attorney.

Business strategy consulting is something I often advise to my clients who have ideas/concepts but don't know how to execute them. We should PM offline as I may have a future need in Atlanta.
Def, we should.
 


tibiafx1

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I did Hennessey as well. I did not do any dealer add ons. I ordered my new wheels myself and I will have a company in Peachtree City do a ceramic coating once picked up. I also had my outlet installed a few weeks ago.

What about you?
I'm glad you brought this back up.

I have financing secured through Bank of America for more than I will need (gives me space to add stuff at the dealer). Rates are so low that if I decide to finance, I'm putting as little down as possible.

I asked my SA for a lease quote yesterday and he said $2175 with $5k down. My BofA finance has me at ~$1800 with $5k down. With that, I'm strongly leaning finance. My purchase price is $118,600 + Fees etc but I ignored the fees below.

Lease:
Total Payments: 2175*36 = $78,300
Downpayment = $5k
Total = $83,300

Finance (2.29% @ 72 months)
Payment with $5k down = 1806.62
Total payments at 36 months with same $5k down = ($1806.62*36)+$5k = $70,038.32

Amount of spend less than lease at 36 months = ($83,300 - 70,038.32) = $13,261.68

Amount left on loan at 36 months = $62,796.33
Residual value 52%
MRM for lease $113,800
Porsche estimated value at end of lease = $59,176
Difference between residual and what's left on loan = $62,796.33 - $59,176 = $3,620.33 upside down on loan

Savings offset from loan payments vs lease = $13,261.68
Benefit of buying over leasing = $13,261.68 - $3,620.33 = $9,641.35


This is really rough but you guys get it.
I am also taking delivery at Hennessy ATL. Chalk on red INR with MSRP at 137k(went crazy with the options). Getting custom wheels and ordered the sport side skirts from Suncoast parts. The sport side skirts on the 4S are only available in the car’s paint color which I think looks kinda off. Getting the sport skirts painted in high gloss black to match the accents.

Please explain “MRM”. Also, did lease quote factor in the $7500 EV discount for a lease? On how many annual miles was this quote based?
 
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Prit

Prit

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I am also taking delivery at Hennessy ATL. Chalk on red INR with MSRP at 137k(went crazy with the options). Getting custom wheels and ordered the sport side skirts from Suncoast parts. The sport side skirts on the 4S are only available in the car’s paint color which I think looks kinda off. Getting the sport skirts painted in high gloss black to match the accents.

Please explain “MRM”. Also, did lease quote factor in the $7500 EV discount for a lease? On how many annual miles was this quote based?
Nice. We need to have an Atlanta connect. Actually, we may all collect on the same day.

MRM = maximum residual MSRP. This is the maximum MSRP set by Porsche when calculating the residual value. For the CT4, it’s set at $113,800. This basically means that the residual value, which is a percent of MSRP (or MRM) cannot exceed $113,800. For example, for 36 months and 12k miles, the residual value on a lease is calculated as 52% of either actual MSRP or MRM, whichever is lower. So even though my MSRP is $118,600, my residual is ($113,800*.52) = $59,176 rather than ($118,600*.52) $61,672. This makes my payment on a lease based off the difference of (118,600 - $59,176) $59,424 instead of ($118,600 - $61,672) $56,928 before interest and taxes. This isn’t too bad for me since I only added $5k above the MRM.

Good question. I’m not sure if he factored in the $7500. That is actually important.
 
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Prit

Prit

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I am also taking delivery at Hennessy ATL. Chalk on red INR with MSRP at 137k(went crazy with the options). Getting custom wheels and ordered the sport side skirts from Suncoast parts. The sport side skirts on the 4S are only available in the car’s paint color which I think looks kinda off. Getting the sport skirts painted in high gloss black to match the accents.

Please explain “MRM”. Also, did lease quote factor in the $7500 EV discount for a lease? On how many annual miles was this quote based?
I should have used your numbers.
- Let's say you have a CT4 and want 36 months and 12k miles/yr.
- Your residual will be 52% off of your MSRP or the MRM, whichever is lower.
- In your case, $113,800 is lower, so your residual based on Porsche's estimates will be $59,176
- The depreciation in your payment will be ($137k-$59k)/36, then they would add taxes and fees, plus interest to this depending on if you pay taxes upfront or roll them in etc.

Basically, the more options you add over the MRM, the worst it is for your payment on a lease.

Someone correct me if I'm wrong, but I believe that is directionally how it's done.
 

tibiafx1

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Tibia= long bone in the leg between the knee and ankle. Fx =medical shorthand for “fracture”.
I should have used your numbers.
- Let's say you have a CT4 and want 36 months and 12k miles/yr.
- Your residual will be 52% off of your MSRP or the MRM, whichever is lower.
- In your case, $113,800 is lower, so your residual based on Porsche's estimates will be $59,176
- The depreciation in your payment will be ($137k-$59k)/36, then they would add taxes and fees, plus interest to this depending on if you pay taxes upfront or roll them in etc.

Basically, the more options you add over the MRM, the worst it is for your payment on a lease.

Someone correct me if I'm wrong, but I believe that is directionally how it's done.
Yikes! Sounds like I may need to finance instead...thanks for the explanation. Which money factor were you quoted?
 
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Prit

Prit

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Tibia= long bone in the leg between the knee and ankle. Fx =medical shorthand for “fracture”.


Yikes! Sounds like I may need to finance instead...thanks for the explanation. Which money factor were you quoted?
He told me the money factor months back and I forgot. I know it should be .002 but I have a feeling they’re gonna mark it up. Porsche Perimeter quoted me .00325. I remember because it was so bad. I can’t remember Hennessy.

Which were you quoted?
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