On the fence

[vxb]

No financial input as I never lease, but wouldn't greater depreciation imply higher lease payments? I thought leasing is essentially paying for the depreciation, conceptually. Just want to be better informed if I've been thinking about it wrong.

In lease you pay a difference between the agreed price and residual value which is computed based on MSRP plus interest. So the residual value will stay the same as 69% of MSRP but the selling price might drop

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[MidwestPCar]

[/QUOTE]

In lease you pay a difference between the agreed price and residual value which is computed based on MSRP plus interest. So the residual value will stay the same as 69% of MSRP but the selling price might drop

I was referring to the comment below. If the point is that the Taycan will depreciate lot, I infer that it's the residual that will drop, not the selling price. Which means greater lease payments.

From my simple search "Lease residual value is calculated by taking the vehicle's Manufacturer's Suggested Retail Price (MSRP) and multiplying it by a predetermined residual percentage. This percentage, set by the leasing company and influenced by factors like make, model, demand, and expected depreciation , forecasts the vehicle's worth at the end of the lease term"

What am I missing?

I would urge you to grind the dealer more aggressively to get a better deal. Remind him that the Taycan and EVs in general suffer a 50% hit in depreciation.

 

[Freeewilly]

A great point! Moreover, on October 1, when the ev incentive goes away, the depreciation hit will be even more severe

I believe the depreciation will be less severe when the tax incentive is gone.
When you can buy/lease a new EV with $7500 tax incentive, it already make the value of a new car $7500 less than MSRP.

 

[whitex]

A great point! Moreover, on October 1, when the ev incentive goes away, the depreciation hit will be even more severe

Why? Depreciation lessens when incentives go away - the incentive is instant depreciation for a used car, since new cars can be bought for less. Your leased price (of new) also goes up Oct 1.

 

[vxb]

Why? Depreciation lessens when incentives go away - the incentive is instant depreciation for a used car, since new cars can be bought for less. Your leased price (of new) also goes up Oct 1.

The demand will definitely drop after the $7500 ev incentive ended. That should lead to more discounts by manufacturers and dealers. Will they be as much as $7500 is hard to say

 

[whitex]

The demand will definitely drop after the $7500 ev incentive ended. That should lead to more discounts by manufacturers and dealers. Will they be as much as $7500 is hard to say

Whatever room the dealer had to give from their end stays the same, but incentive goes away by $7,500. Generally prices of new and used cars go up. The only thing which could counter is would be manufacturer incentives to move cars, but whether or not those will ever come is completely unknown.

Extreme example: Nissan Leaf with MSRP of $28K. $7,500 drops it to $21.5K, which is a 27% instant depreciation. No way anyone buys a 1 day old Leaf from you for 15% discount off MSRP as long as the incentive is there. Once the incentive goes away, %15 off for one day old car makes a great deal. End result, new and old prices went up.

 

[Lazy]

owning a taycan is an emotional decision. my wife drives mine more than i do but i still love seeing it in the drive and look forward to taking it out. if money isnt an issue go get it and dont over think.

This comment deserves more attention

Porsche in general is a brand you choose because of emotion, not finance

Yes it's great to "do the math" and make sure you can afford it, but past a certain point you buy the car(s) or you don't

This is also one of the reasons the depreciation conversation is a moot one

If you are still on the fence the brand may not be for you, at least not yet

Best of luck OP

 

[vxb]

This comment deserves more attention

Porsche in general is a brand you choose because of emotion, not finance

Yes it's great to "do the math" and make sure you can afford it, but past a certain point you buy the car(s) or you don't

This is also one of the reasons the depreciation conversation is a moot one

If you are still on the fence the brand may not be for you, at least not yet

Best of luck OP

Thank you, good points. I absolutely can afford it. I drive very little, and I4 is not a bad car either. I wish I hated it which would’ve made decision easy

 

[Caraholic]

I would personally just do a one year lease on a gen 1.1 Turbo or Turbo S. There are still some crazy good deals out there. Not really any great deals on the 1.2 even with the dealers massively discounting them.

 

[JackSparrow]

If you retain the i4, you will also have some further depreciation although it is likely to flatten out a bit.
Even when a vehicle is fully paid, depreciation, maintenance, repairs, insurance, and energy costs remain. The Taycan option will have somewhat fixed costs, within the lease term you will likely have no service costs, may get away without replacing tires, and the lease payment is the limiting factor of depreciation cost.
The I4 will continue to depreciate over the same period if you retain it. Let’s guess its $11,000, then tires $1500, service $800, plus maybe interest cost or lost interest or investment income from the $32,000 over the period.
So @ 5% $3000 for 2 years minus income taxes as an approximate data point. We’re not considering either the monthly lease payment nor whether the 32k is paying off a loan or just paid out of existing funds.
Just a quick, admittedly incomplete calculation is keeping the BMW will cost about $600/month for a 2 year period, likely less than the current cost of ownership to date.
Is it worth getting the Taycan, that is a personal decision partly based on what you feel comfortable with spending on a car.
I, like you, did a test drive and really liked it way too much. I had also driven a 911, which was what I started out looking for. I previously had a Mercedes E400 coupe that was perfectly fine, just coming off of CPO warranty, had almost 100k miles, and was pretty close to new, inside and out.
A year later into the Taycan, I’m not excited at the depreciation, but there’s nothing I’ve driven before or since that I like as much. I do admit that nobody needs to drive something this nice, but it is a pleasure I appreciate every time I drive it.

 

[vxb]

If you retain the i4, you will also have some further depreciation although it is likely to flatten out a bit.
Even when a vehicle is fully paid, depreciation, maintenance, repairs, insurance, and energy costs remain. The Taycan option will have somewhat fixed costs, within the lease term you will likely have no service costs, may get away without replacing tires, and the lease payment is the limiting factor of depreciation cost.
The I4 will continue to depreciate over the same period if you retain it. Let’s guess its $11,000, then tires $1500, service $800, plus maybe interest cost or lost interest or investment income from the $32,000 over the period.
So @ 5% $3000 for 2 years minus income taxes as an approximate data point. We’re not considering either the monthly lease payment nor whether the 32k is paying off a loan or just paid out of existing funds.
Just a quick, admittedly incomplete calculation is keeping the BMW will cost about $600/month for a 2 year period, likely less than the current cost of ownership to date.
Is it worth getting the Taycan, that is a personal decision partly based on what you feel comfortable with spending on a car.
I, like you, did a test drive and really liked it way too much. I had also driven a 911, which was what I started out looking for. I previously had a Mercedes E400 coupe that was perfectly fine, just coming off of CPO warranty, had almost 100k miles, and was pretty close to new, inside and out.
A year later into the Taycan, I’m not excited at the depreciation, but there’s nothing I’ve driven before or since that I like as much. I do admit that nobody needs to drive something this nice, but it is a pleasure I appreciate every time I drive it.

Thanks for your detailed response. Taycan insurance is also $800 more a year than I4. Anyway, it's not a financially sound move but a purely emotional one, unless BMW suffers a catastrophic failure in a year, when it's out of warranty. You are right about a new set of tires and also a registration renewal for I4

 

[vxb]

I offered a one pay lease for $900 a month which should be doable for them without fudging the base one pay lease MF of 0.0026, but the dealership decined it. I let them know I would be there and sign the lease if they change their minds before EOD tomorrow.

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