Buy vs. leasing... - Ferrari Life
 
LinkBack Thread Tools Display Modes
post #1 of 14 Old 10-01-2009, 11:19 AM Thread Starter
 
Join Date: Sep 2009
Ferrari Life Posts: 11
Buy vs. leasing...

I was curious what percentage of the owners here buy vs lease? I, like many here, have their own business. Leasing cars is nice as you can write off the lease and as everyone knows there basically is no depreciation of a passerger car (unlike a SUV) if you purchase outright.

My problem is that I cannot imagine leasing a Ferrari - I want to own it and care for it like it one of my kids! I just dont have the attachment with a leased car. Curious if anyone has leased a Ferrari to get the write off and then structured the lease so little residual at the end an then purchased it at the end of the lease to own it outright. Sorry if hard to follow but it will make sense to business owners. It would be nice to get a 50% discount due to the tax rates and ability to write off. (no, I am not some lease salesman!)
scion driver is offline  
Sponsored Links
Advertisement
 
post #2 of 14 Old 10-01-2009, 11:25 AM
Owner
 
Granucci's Avatar
 
Join Date: Jan 2007
Location: far and away
Ferrari Life Posts: 6,204
My first Ferrari was a lease, but for only six months. AND it was a used not new Ferrari. Reason was, I wanted that particular car and needed to pull the trigger and was not about to many things like my bank and my money, so, the leasing company, whom I had a relationship with was able, with my check, to make it happen right away: all they needed was on file.

Bought out the lease six months later, for a very slight loss of funds, and was good to go as I financed it at 2.0% for life of loan [50% of the value as I put a lot of cash down, and felt the use of a 2% loss with USAA was justified...I was/am heavily into real estate and it was a good use of funds].

Leasing can sometimes be a good thing as IF the car has problems or such and you did what was required of you, you can walk away from the value.

Many here can state the pros/cons of typical leases but, in exotics, thinking if getting into to one, a lease has many, albeit large costs, pros as you can walk away from some repair / expenses.

Guide to the Galaxy: Don't Panic
Rik -- LAH !


Current:
Past:
1990 Mondial T Cabriolet SN 86247 : Red/Tan
1995 456 GT 2+2 SN 99987 : Roso Metalizzato [Fer 311/C] & Tan
Granucci is offline  
post #3 of 14 Old 10-01-2009, 11:35 AM
Owner
 
colonel1961's Avatar
 
Join Date: Apr 2008
Location: North Alabama
Ferrari Life Posts: 1,028
I have a buddy/business partner in Arizona who leases his 599 through his (other) company. He has not been called on it, so far. I would not recommend trying to get it by the IRS. But if you want to lease versus buy, ignoring the tax implications, that's up to you...

If someone has a different opinion about the IRS and its interpretations, please let me know.

Colonel1961
- - - - - - - -
Current: 250 SLX, 8.2L (Sea Ray)
Former: 308 GTS QV; F355B; 360 Modena Spider F1; F430 F1 (2x); 550 Maranello; 599 GTB Fiorano F1; 612 Scaglietti
colonel1961 is offline  
 
post #4 of 14 Old 10-01-2009, 11:41 AM
Owner
 
Granucci's Avatar
 
Join Date: Jan 2007
Location: far and away
Ferrari Life Posts: 6,204
right Col. Do not get into IRS, Legal, nor law enforcement loops: stay clean.

I do know of persons who start an LLC/LLP in Montana to escape taxes and registration fees, or make them available for tax purposes during initial purchase.

BUT you had better register the car correctly to the state of residence: which is why, when I retire [ya' right] I'll be residing in NV or such.

anyway, back on lease: they can be expensive but the alternative to ownership, is ownership as in my case was decided -- I'm keeping them for long term. IF you want out of an exotic, lease is a very viable option to consider albeit, like I've said--more expensive in the short run.

Guide to the Galaxy: Don't Panic
Rik -- LAH !


Current:
Past:
1990 Mondial T Cabriolet SN 86247 : Red/Tan
1995 456 GT 2+2 SN 99987 : Roso Metalizzato [Fer 311/C] & Tan
Granucci is offline  
post #5 of 14 Old 10-01-2009, 11:59 AM
Owner
 
colonel1961's Avatar
 
Join Date: Apr 2008
Location: North Alabama
Ferrari Life Posts: 1,028
Quote:
Originally Posted by Granucci View Post
I do know of persons who start an LLC/LLP in Montana to escape taxes and registration fees, or make them available for tax purposes during initial purchase.
That reminds me of the look on the face of a young lady at the License Office when I bought my previous 360. Without a trade-in, the tax and tag fees were over $8,000. Of course, I had already calculated the taxes and fees ahead of time and was prepared for the 'pleasure of supporting my local government' - but I thought she was gonna pass out!


Colonel1961
- - - - - - - -
Current: 250 SLX, 8.2L (Sea Ray)
Former: 308 GTS QV; F355B; 360 Modena Spider F1; F430 F1 (2x); 550 Maranello; 599 GTB Fiorano F1; 612 Scaglietti
colonel1961 is offline  
post #6 of 14 Old 10-01-2009, 12:23 PM
Owner
 
Granucci's Avatar
 
Join Date: Jan 2007
Location: far and away
Ferrari Life Posts: 6,204
Quote:
Originally Posted by colonel1961 View Post
That reminds me of the look on the face of a young lady at the License Office when I bought my previous 360. Without a trade-in, the tax and tag fees were over $8,000. Of course, I had already calculated the taxes and fees ahead of time and was prepared for the 'pleasure of supporting my local government' - but I thought she was gonna pass out!


may a few swoon when I mentioned how much a tune up and yearly oil/fuids change cost could be

Guide to the Galaxy: Don't Panic
Rik -- LAH !


Current:
Past:
1990 Mondial T Cabriolet SN 86247 : Red/Tan
1995 456 GT 2+2 SN 99987 : Roso Metalizzato [Fer 311/C] & Tan
Granucci is offline  
post #7 of 14 Old 10-01-2009, 12:30 PM Thread Starter
 
Join Date: Sep 2009
Ferrari Life Posts: 11
Regarding the tax/irs implications....if you lease a Ferrari, can justify milage for business use, you can write off the percentage of "business use". There is nothing shady with that. The IRS can't (at least not presently) tell me what kind of car I own and drive. Now for those who have unlimited financial resources this may seem ridiculous but if you, like myself, are not independantly wealthy yet the thought of buying a new -ish 360 or 430 for 1/2 the out of pocket is appealing! A good friend (especially good now!) in SF who owns an ad agency is taking possesion of his California as soon as it is in any day and will be writing off the lease.
scion driver is offline  
post #8 of 14 Old 10-01-2009, 12:40 PM
Owner
 
Granucci's Avatar
 
Join Date: Jan 2007
Location: far and away
Ferrari Life Posts: 6,204
That nice Black one at FofSF. Saw it about four weeks ago.

In CA a CA writeoff might make sense for a ad agency. Shoot, he could drum up a shoot and write of quite a bit to make it more legal

IRS is no fool these days to blingy writeoffs. IIRC, I though I had to list my depreciation schedule and even name the car, but can't remember. They can get very anal on what is legal: thinking the ol' home office thing and all.

--leave that for the CPAs-- I never get into doing my taxes and leave that to experts.

as for leasing, well I stick by the needs, and desired results. I am truly guessing this agency guy, will not be keeping the car for long and probably has figured a way to get the car, write off some, and then not be bothered with the tail end: makes for true way to go, especially, specifically, since no one, no one, knows what issues are luring in the CA...I Know, knowing Ferraris trackrecord, even though a better company did the top, that the tops on F-cars are terrible...no matter the model. I would expect that to go first.
then
The mechanics are proven, but not on this example so, stay tuned....I expect warranty and other issue repairs.

Getting the car from Boardwalk, will be a good way to go....they have to pony up, and know of one issue, last year IIRC when FofSF sold a 456 that had its engine go toastie a couple months later: Boardwalk is ponying up and that car will be on the road again under 'warranty'.....

If there is more, specifics you are looking for, what are they? Costs of what period, or other issues. Let us know so we can yack about it.
rik

Guide to the Galaxy: Don't Panic
Rik -- LAH !


Current:
Past:
1990 Mondial T Cabriolet SN 86247 : Red/Tan
1995 456 GT 2+2 SN 99987 : Roso Metalizzato [Fer 311/C] & Tan
Granucci is offline  
post #9 of 14 Old 10-01-2009, 12:40 PM
Owner
 
colonel1961's Avatar
 
Join Date: Apr 2008
Location: North Alabama
Ferrari Life Posts: 1,028
Quote:
Originally Posted by scion driver View Post
Regarding the tax/irs implications....if you lease a Ferrari, can justify milage for business use, you can write off the percentage of "business use". There is nothing shady with that. The IRS can't (at least not presently) tell me what kind of car I own and drive. Now for those who have unlimited financial resources this may seem ridiculous but if you, like myself, are not independantly wealthy yet the thought of buying a new -ish 360 or 430 for 1/2 the out of pocket is appealing! A good friend (especially good now!) in SF who owns an ad agency is taking possesion of his California as soon as it is in any day and will be writing off the lease.
I understand the appeal. However, I work from home (another tax deduction I do not take) and my trips to the Post Office and occasionally the airport probably won't save me much money. But, I am taking a pure business trip to Virginia (1,500 mi. round trip) next month - that would certainly account for 3/4 of my 430's total miles - are you suggesting that I sell my 430 to my company (or the one I'm taking the trip for) and take the tax deduction? I mean, if tax advice from Ferrari Life is not legally binding, what would be?



p.s. if it works, I'll pay for your first Ferrari oil change...

Colonel1961
- - - - - - - -
Current: 250 SLX, 8.2L (Sea Ray)
Former: 308 GTS QV; F355B; 360 Modena Spider F1; F430 F1 (2x); 550 Maranello; 599 GTB Fiorano F1; 612 Scaglietti
colonel1961 is offline  
post #10 of 14 Old 10-01-2009, 04:14 PM Thread Starter
 
Join Date: Sep 2009
Ferrari Life Posts: 11
Ok, this advice is from my CPA of 20 years who is actually a conservative guy BUT will take a deduction if it is legit. If your company purchases the car, you get, what, $2000 depreciation a year on a car used 100% for business use. So on the California it should be depreciated in a 120 years If you lease that car (leases are available for used Ferrari's too) in a lease that is structured so that you have say $20,000 residual at the end of the lease you have gotten the write off of the lease and now can purchase the car for $20,000; which you can now depreciate at $2000 per year. I have two businesses, one of which you would not think needs a car let alone a Ferrari, but I have always been able to structure things so I can legitamently justify the miles. It is a matter of know what counts and DOCUMENT. Again, this I am sure seems ridiculous for someone independantly wealthy but as long as I have to work, no matter how lucrative my work, I will write off anything I can. I hope to have a 360 or 430 in the coming months to cash in on my oil change!!!! (I guess you can pay to have my Scion done at jiffy lube right now. Lol!) I am just curious if others have the same thought that you want to OWN a Ferrari, not just lease (rent) it.
scion driver is offline  
post #11 of 14 Old 10-01-2009, 04:57 PM
Owner
 
colonel1961's Avatar
 
Join Date: Apr 2008
Location: North Alabama
Ferrari Life Posts: 1,028
Quote:
Originally Posted by scion driver View Post
Ok, this advice is from my CPA of 20 years who is actually a conservative guy BUT will take a deduction if it is legit. If your company purchases the car, you get, what, $2000 depreciation a year on a car used 100% for business use. So on the California it should be depreciated in a 120 years If you lease that car (leases are available for used Ferrari's too) in a lease that is structured so that you have say $20,000 residual at the end of the lease you have gotten the write off of the lease and now can purchase the car for $20,000; which you can now depreciate at $2000 per year. I have two businesses, one of which you would not think needs a car let alone a Ferrari, but I have always been able to structure things so I can legitamently justify the miles. It is a matter of know what counts and DOCUMENT. Again, this I am sure seems ridiculous for someone independantly wealthy but as long as I have to work, no matter how lucrative my work, I will write off anything I can. I hope to have a 360 or 430 in the coming months to cash in on my oil change!!!! (I guess you can pay to have my Scion done at jiffy lube right now. Lol!) I am just curious if others have the same thought that you want to OWN a Ferrari, not just lease (rent) it.
Thanks for the additional information. I hate to miss out on deductions - I just have to temper that with the increased chance of an audit - and I'm not doing anything wrong, I just don't want the potential hassle (which they keep track of for years!) over a thousand bucks or so...

Good luck with the 360/430! Let me know when you get 1,500 miles on her!


Colonel1961
- - - - - - - -
Current: 250 SLX, 8.2L (Sea Ray)
Former: 308 GTS QV; F355B; 360 Modena Spider F1; F430 F1 (2x); 550 Maranello; 599 GTB Fiorano F1; 612 Scaglietti
colonel1961 is offline  
post #12 of 14 Old 10-03-2009, 08:25 AM
Administrator
Owner
Elite Member
 
Boxer's Avatar
 
Join Date: Apr 2004
Location: UK & Texas
Ferrari Life Posts: 15,136
Quote:
Originally Posted by colonel1961 View Post
I just have to temper that with the increased chance of an audit - and I'm not doing anything wrong, I just don't want the potential hassle (which they keep track of for years!) over a thousand bucks or so...

+1, on the audit. A costs of having to go through a major audit will easily eat up any potential savings.
Boxer is offline  
post #13 of 14 Old 10-04-2009, 04:36 PM
Owner
 
colonel1961's Avatar
 
Join Date: Apr 2008
Location: North Alabama
Ferrari Life Posts: 1,028
Quote:
Originally Posted by Boxer View Post
+1, on the audit. A costs of having to go through a major audit will easily eat up any potential savings.
Indeed. And then you're on 'the list'...


Colonel1961
- - - - - - - -
Current: 250 SLX, 8.2L (Sea Ray)
Former: 308 GTS QV; F355B; 360 Modena Spider F1; F430 F1 (2x); 550 Maranello; 599 GTB Fiorano F1; 612 Scaglietti
colonel1961 is offline  
post #14 of 14 Old 10-04-2009, 05:56 PM Thread Starter
 
Join Date: Sep 2009
Ferrari Life Posts: 11
Yes, but if you can atribute the driving for anything related to your business (which isnt hard to do when few miles are driven and you own 3 other cars) uncle sam ends up paying 50% of your new 430 (leased). Completely within the rules. I am not aware of cars triggering any audits. I have purchased a lot of expensive SUV over the last 20 years and have never been audited.
scion driver is offline  
Reply

Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page
Display Modes
Linear Mode Linear Mode



Posting Rules  
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

 
For the best viewing experience please update your browser to Google Chrome
Copyright 2012 ONE Media, Inc.
FerrariLife is independently run with no affiliation with Ferrari SpA
Ferrari for Sale | Maserati for Sale