So, you’re thinking of getting a new Porsche and considering the different methods of funding the car. In the UK you have several methods available to you, from a simple outright cash purchase to a one of several finance options that give you a manageable monthly payment.
A simple loan in the traditional form over a few years paying off the car in full will usually translate into a monthly payment way too high to fit into many peoples budgets on a car as expensive as a Porsche – borrowing £100,000 over 3 years gives a prohibitively high monthly payment of £2777 a month before any interest is even applied, way more than most people’s mortgage so it’s rare to see this method used when a lease might only cost a third of that figure.
A PCP finance deal (Personal Contract Purchase) can be an effective tool if you’re considering ownership of the car at some point but don’t want to commit immediately. With a PCP you offset a chunk of the Porsche’s value to the end of the contract thereby reducing the monthly payment. This amount offset is calculated based on the car’s forecasted value at the end of the arrangement, and at the end of the contract you have the option to buy the car for this final value, or simply hand the keys back and walk away. Payments will vary depending on the size of your initial deposit and the mileage agreed over the term. You are required to keep your new Porsche in good condition and service and maintain the car in line with the manufacturer’s requirements, and also insure it. The downside of this method has been exposed recently with Coronavirus affecting the economy and pushing down used car prices, so a large amount of customers getting to the end of their finance agreements are finding their 3 year old Porsche isn’t worth the amount it was forecast to be worth and taking up the option to buy it is effectively paying over market value, so they are handing the keys back – yes the contract has saved them from losing too much money, but the benefit of being able to purchase the new car has been lost.
Personal or Business leasing is the fastest growing method in the UK, with more customers realising that tying up a large amount of capital in a fast depreciating asset doesn’t make sense. As the typical customer will want to change his car to the latest vehicle in a few years’ time then the option to buy at the end of the PCP mentioned above loses its appeal, and a fixed amount that fits into their budget alongside other bills to cover the cost of their new car makes life simple, and an optional service plan to cover routine servicing, maintenance and tyres can be added for complete piece of mind.
There are several factors specific to the Porsche brand that are worth consideration if you are looking to lease – first is the brand’s propensity to offer a huge options list. Yes it’s great to be able to personalise your new pride and joy and it’s very easy to get carried away selecting options to make the car perfect for you, but remember when leasing that you aren’t the final owner. As far as the leasing company is concerned the car they will get back at the end of the contract is something they will look to sell at auction and move on, their concern is only for its saleable value, they don’t care that you spent hours agonising over which colour to pick, which alloys you chose or whether to pay the extra to have the Porsche crests embroidered on the headrests.
All of this means that the options you choose are purely for your benefit and you will pay the whole cost of them over the period of your lease, so if you add £10,000 of extra equipment (which on a new Porsche is easy to do and a very conservative estimate of how much you might spend) and the lease deal is over 3 years, then the £10,000 is simply divided by 36 and added to the leasing cost – so nearly £300 a month is added to the cost, your easily manageable £600 a month leasing payment now looks like a rather expensive £900 a month, and you can lease a £30,000 car on its own for the cost of your options alone. So if you’re leasing, keep the options to a minimum – yes, pick out those essential to make the car enjoyable but don’t go overboard. Better yet, look for models in the Porsche range like the GTS where most of the best bits of equipment have been added in as standard, they can save you money over taking a basic car and adding loads of kit.
There are also times when leasing a Porsche really isn’t a good idea. This is when you’re looking at a model that either is such a rare limited edition that it will go up in value – for example the 911 RS 4.0 now worth a huge amount more than their original list price, or more likely limited edition cars like the Cayman GT4, the 911 GT3 or GT3 RS. These cars are so highly sought after that whilst they do depreciate, their rareness means they do it at such a slow rate that you lose very little of their selling price over time. Why pay £2000 a month to lease a 911 GT3 when it is only losing £5000 a year in value? Those figures don’t add up, so on limited edition models that have proved good investments that’s the time to either buy outright for cash or use a finance product like HP or PCP that will allow ownership at the end so you can benefit rather than the leasing company.
If you are in the UK and considering this, then you can visit Orangewheels for the latest Porsche leasing deals and see how much a new model will cost you. Prices are surprisingly affordable – a new Cayman or Boxster will start in the £600 a month range, as will the Macan SUV. Cayennes are from £750 - £800, the Taycan is incredibly popular due to the huge reduction in taxation electric cars bring for business users and starts around the £850 figure, and something special like a new 911 will start from around the £1000 a month mark. As mentioned, these are just approximate starting prices and those doing higher mileages or who get creative with the options list can easily exceed that but it does show just how affordable these supercars are for the average customer when compared to their list prices.