mjr24

Looking at getting into a 911.....dealer advertising a super lease deal on this car.

However, I noticed a statement in their advertisement....it says "an extra charge may be imposed at the end of the lease between the residual value of the lease property and the realized value at the end of the term."

I've leased many high-priced cars, never seen this. Does this mean they could stick me with some huge charge at the end of the lease? This is apart from the normal overage you are charged for being over miles.

mmarshall

The way they seem to have specifically worded it, if the car's official residual value (kbb, auto-trader, etc....) is less than the residual value than they (or the automaker) planned on, then bend over......they can charge you the difference.

That is basically just covering their a**es. Nissan, for example, lost a ton of money on lease deals, back in the early-mid 2000s, when their (then) rather unimpressive lineup of vehicles depreciated substantially more than what was figured on in the lease deals. Customers brought their cars back, turned in the keys, and left the dealerships with a bunch of undervalued cars that they couldn't fully recover their money on. BMW's of course, were the opposite....because of those cars' low depreciation, BMW, on the other hand, was able to offer relatively good lease-deals (by upmarket-car standards) and still make money because of the high demand and low depreciation for their products.

I wouldn't know for sure without reading the contract's fine print myself, but, right off the bat, from what you describe, it sounds to me like this Porsche dealership is offering a so-called "super" lease deal, with payments unrealistically low for a car of a 911's price. The bait, of course, is the low monthly payments up front (depending on how much you put down)......but the catch is they know that the car is likely to actually depreciate more than that. The result is that what you save up front at first will probably be due at the end of the lease-term...assuming that you don't actually buy the car when the lease is over, if that is in the clause. But, I'd also be willing to bet that, conversely, if the car is worth MORE at the end of the lease-contract, THEY won't refund YOU the difference.

Sulu

This is the way I interpret it...

In order to give you this "super lease deal", the leasing company is raising the residual value of the lease -- raise the residual value and lower the amount to be leased. But if that residual value turns out to be too high at the end of the lease (greater than the market value of the used car) when you return the car, the leasing company reserves the right to charge you the difference between the residual value on the contract and the actual market value.

The leasing company does not want to risk losing money on the car so they may charge you extra if the market value at lease end is too low, even though YOU WERE NOT RESPONSIBLE for the lower-than-expected residual.

FastTags

Yes as stated above they will charge you more if worth less

mjr24

Yeah, I feel that is a bit sneaky on their part......glad I caught that. Last thing you want to do is be stuck with a $10-15k payment at the end when you have no control over the residual really.

FastTags

Spot on ! There will be a lot of unhappy customers at the end if the Term

mjr24

I asked the sales manager about this clause and he is insisting it is a closed end lease....that I am only responsible for excessive wear and tear. It's a Porsche Financial Lease.....thoughts? Could he blowing smoke up my a**?

I emailed a couple other dealers....they said there was no way it was a Porsche Financial Lease.

Joeb427

iTrader: (1)

and if the lessee gets a Carfax hit....

SW17LS

This is not a closed end lease, which 99.9% of consumer auto leases are.

This is whats called an "open ended" lease, which means you will bear responsibility for the resale value at the end of the lease if its less than the residual, but get nothing if its more. A lot of commercial car leases are open ended.

I would not sign such a lease as a normal consumer.

FastTags

I would get it in writing that residual + miles is all you pay.

mjr24

I have it in the form of his emails.......

"It is a closed end lease. The charges that they are talking about would be any excessive wear and tear. The lease is with Porsche financial ."


I agree that originally it sounded open-ended......but I'm not aware of ANY car finance companies...let alone big ones like BMWFS, Porsche Finance, MB Finance....doing these anymore. We aren't talking about a $10k car. I will be highly pissed to take time out of my day to go there to find out he boldly lied if it ends up being open-ended. I don't think these guys are that hard-up for customers.

SW17LS

I would ask them to forward you over their standard lease contract and review it in the comfort of your own home, then make sure the one you sign is the same contract.

Companies do still do open ended leases. MB is famous for this, they have what they call a "balloon finance" which is essentially just an open ended lease.

mjr24

Good idea SW, I am going to have them send me over a copy.

SW17LS

Post what you find here...I'm curious!

T0ked

iTrader: (2)

If this clause was on a Hyundai or Nissan, I'd think twice, but this is a Porsche. Have you seen the depreciation on a 911? I think you are safe.