This was such a great explanation of the differences. I think the average person can't see past the marketing BS of a lease and just feel it's more trouble free. Thank you for always providing the no BS point of view on things.
You’re the one who opened my world to supercars and entrepreneurship back in 2014 in instagram and gave me goals in life today and I can say i’m getting quite close to finally getting one. Always grateful for you pej! I even remember your name!
My $200k..is going into the stock market..shorting...making 40-50k/month.. but YES!! LOVE YOUR hack..and drive a Wraith.. your krypto wraith was a keeper!!!!..
Hi. I just started watching your videos this week and I really enjoy listening to what you have to offer as far as your knowledge and experience with exotic cars. Looking forward to watching my videos. Thanks for the great content!
The issue with buying a used car is the possible repair costs you might incur driving something out of warranty that you don't know how it's been treated by previous owners. You might get lucky and get a trouble-free car or you might get stuck with a high repair bill. Also, with how exotic cars have "appreciated" over the past few years, finding a clean-titled one with low miles for a reasonable price is almost impossible. So depending on how many miles you put on your current exotic, when you sell it you won't be able to get into a clean low-mileage one for the same money.
I huge and prevalent misconception in the car market, even amongst those who have been in it a long time, is that a lease contract is set in stone and you can't exit when you want to and "excess miles" will penalize you. Not true! You can trade in or privately sell your leased car at any time you want, the lender doesn't care (just like a mortgage lender for your home doesn't) if you exit it early, as long as they get their payoff. Secondly, you pay for miles regardless of how you acquire the vehicle...if your same car as mine has 10,000 more miles and we both finance or outright own it, of course I can and will sell it for more $. Same same. And the other point I wanted to make is that yeah it would be great to pick the right preowned vehicle that won't or barely go down in value -- even better if it goes up like these GT3s and other very desirable models! -- but the issue is transaction and "maintenance" costs. I don't mean fixing stuff, I mean, just to hold it we have to pay excise taxes and what not. And every time we purchase, in many states or countries, we must pay sales tax (thousands and of course tens of thousands if it's a high dollar machine), registration, title, license plates, doc fees, blah blah all that. Sure, maybe it is just a couple grand or so for non-high dollar machines, but it's considerable when they are exotics right? I know folks have turned to Montana for plates to avoid some of this and what not, but that's not feasible for many of us, is it? That's my stumbling block. And I'm sure PJ would agree, the #1 most important thing is to BUY RIGHT, ie. you win when you don't pay too much ... pay low enough, somehow be able to successfully negotiate low. I did that once with a 911 (not an ECH member) and sold it after almost 3 years for a $2500 gain. But what I did is not avail to most retail buyers...
Exactly and it’s misinformation. And the good part is because of leasing the depreciation is much slower compared to financing. Plus this market now actually helps as well.
I'm surprised you're missing the two biggest benefits of leasing an exotic: Corporate tax deduction, and tax payments only on the lease payments. If you have an LLC, your lease payments are tax deductible using pre-tax dollars. But the biggest benefit is you only pay sales tax on the lease payments. If you use a bank that allows you to sell your vehicle to a dealership penalty free, you can avoid paying taxes on 75% of the vehicle cost because the dealer is buying the car out of the lease, not you. If you sell to an out of state dealer in a hotter market, your wholesale offer can be $5k-$10k below your local retail market, but save you $20k or more in taxes. Ferrari buyers use this trick all the time, and it works best on new models that require you give the dealer an 18 month right of refusal. I'll gladly give my lease back to them in 6-12 months and let them do all the legwork of selling the car and getting top dollar while saving me $20k in taxes. This tactic also works on all Chrysler Capital leases as well. You can literally drive a Hellcat free for 6-12 months right now. You're never going to turn in your lease so you negotiate the lowest mileage possible on the best terms on all these cars. You almost always buy out your exotic lease, unless you bought the wrong car and it tanked. You can lease used exotics so the same rules apply, and you treat the lease as any other loan, except with the benefit of tax deferment onto a dealer. As long as your lease money factor isn't a ripoff, a lease bares very little difference to a conventional loan from a financial standpoint. Another added benefit is if the car gets into a major accident that goes on Carfax (which is devastating for an exotic), you have the option to give it back at the end of the lease, avoiding an even more massive depreciation.
Viperguy: you pay sales tax only on the lease payments on ANY lease, no need for a biz/corp/llc. If you then decide to purchase the vehicle, then you owe the remainder of the tax based on the purchase price at that time you buy it.
@@raheeb1 I am talking about the entire lease payment is tax deductible on your corporate pre-tax dollars. If you pay 100K in lease payments that 100K is tax deductible, regardless of whether you buy it out or not. And PJ lives in Florida and doesn't have to worry about the income tax on the state side, in other states a corporate lease deduction is also a benefit on the state side income tax as well as the Fed. You can't take the full corporate deduction on a standard loan, it has to be depreciated across a five-year term, not based on your payments. So if you keep the vehicle for only 8 months and then flip it, you basically paid full tax for the vehicle, and only got a small business tax deduction. If you would have least it, 100% of all eight months of payments and your down payment would have been corporate tax deductible, also lowering your income tax if you own your LLC, and you would have only paid tax on that small amount. Preaching to the choir here.
With a lease there is something called a money factor which is essentially the interest rate which determines the monthly payment along with the residual. Also with a lease you can purchase at the end of terms and in fact can negotiate that buyout. So if the car is worth more at the end than the payout then you win, if not you give it back. What not mentioned here is the depreciation curve that you also experience with a purchase of a new car so that money is also lost just like a lease. Pros and cons to everything. and more factors to consider than what is mentioned here. Next up is balloon financing.
great food for thought! Just came across your site as I'm considering replacing my X6 with a newer model X6 5.0. I've thought the Urus or DBX were out of reach though I'm intrigued by the "hack." I'd like to hear your take on if this strategy will differ, be easier, or more difficult in a declining economy vs. the bull run we've seen over the past decade. thx!
I'm curious as to why exotics seem to operate this way.I'm assuming because of the low production volumes of the manurfacturers. I'm glad I've never leased a car,even though I in the past have been tempted to do so
While I agree with him that leases are terrible for the most part, there are times when it does serve its purpose. Most of the things he says about cars appreciating only works in times like now where the economy is good and inflation is dictating the price of used cars. But when shit hits the fan, you don't want to be 200k into a car that everyone is trying to get rid of. The fed is steadily raising interest rates which means people will have to pay way more to get into exotics, real-estate and etc. This is when leasing makes sense because you aren't buying and locking yourself into something that is depreciating like crazy. Since most of the wealth in this country comes from real-estate, when that money stops, you will not see people running out to buy up those Lambo's and Ferrari's.
This was such a great explanation of the differences. I think the average person can't see past the marketing BS of a lease and just feel it's more trouble free. Thank you for always providing the no BS point of view on things.
Glad it was helpful!
You’re the one who opened my world to supercars and entrepreneurship back in 2014 in instagram and gave me goals in life today and I can say i’m getting quite close to finally getting one. Always grateful for you pej! I even remember your name!
Amazing, thank you!
My $200k..is going into the stock market..shorting...making 40-50k/month.. but YES!! LOVE YOUR hack..and drive a Wraith.. your krypto wraith was a keeper!!!!..
Hi. I just started watching your videos this week and I really enjoy listening to what you have to offer as far as your knowledge and experience with exotic cars. Looking forward to watching my videos. Thanks for the great content!
Thank you!
The issue with buying a used car is the possible repair costs you might incur driving something out of warranty that you don't know how it's been treated by previous owners. You might get lucky and get a trouble-free car or you might get stuck with a high repair bill. Also, with how exotic cars have "appreciated" over the past few years, finding a clean-titled one with low miles for a reasonable price is almost impossible. So depending on how many miles you put on your current exotic, when you sell it you won't be able to get into a clean low-mileage one for the same money.
I huge and prevalent misconception in the car market, even amongst those who have been in it a long time, is that a lease contract is set in stone and you can't exit when you want to and "excess miles" will penalize you. Not true! You can trade in or privately sell your leased car at any time you want, the lender doesn't care (just like a mortgage lender for your home doesn't) if you exit it early, as long as they get their payoff. Secondly, you pay for miles regardless of how you acquire the vehicle...if your same car as mine has 10,000 more miles and we both finance or outright own it, of course I can and will sell it for more $. Same same. And the other point I wanted to make is that yeah it would be great to pick the right preowned vehicle that won't or barely go down in value -- even better if it goes up like these GT3s and other very desirable models! -- but the issue is transaction and "maintenance" costs. I don't mean fixing stuff, I mean, just to hold it we have to pay excise taxes and what not. And every time we purchase, in many states or countries, we must pay sales tax (thousands and of course tens of thousands if it's a high dollar machine), registration, title, license plates, doc fees, blah blah all that. Sure, maybe it is just a couple grand or so for non-high dollar machines, but it's considerable when they are exotics right? I know folks have turned to Montana for plates to avoid some of this and what not, but that's not feasible for many of us, is it? That's my stumbling block. And I'm sure PJ would agree, the #1 most important thing is to BUY RIGHT, ie. you win when you don't pay too much ... pay low enough, somehow be able to successfully negotiate low. I did that once with a 911 (not an ECH member) and sold it after almost 3 years for a $2500 gain. But what I did is not avail to most retail buyers...
Exactly and it’s misinformation. And the good part is because of leasing the depreciation is much slower compared to financing. Plus this market now actually helps as well.
I'm surprised you're missing the two biggest benefits of leasing an exotic: Corporate tax deduction, and tax payments only on the lease payments. If you have an LLC, your lease payments are tax deductible using pre-tax dollars. But the biggest benefit is you only pay sales tax on the lease payments. If you use a bank that allows you to sell your vehicle to a dealership penalty free, you can avoid paying taxes on 75% of the vehicle cost because the dealer is buying the car out of the lease, not you. If you sell to an out of state dealer in a hotter market, your wholesale offer can be $5k-$10k below your local retail market, but save you $20k or more in taxes. Ferrari buyers use this trick all the time, and it works best on new models that require you give the dealer an 18 month right of refusal. I'll gladly give my lease back to them in 6-12 months and let them do all the legwork of selling the car and getting top dollar while saving me $20k in taxes. This tactic also works on all Chrysler Capital leases as well. You can literally drive a Hellcat free for 6-12 months right now. You're never going to turn in your lease so you negotiate the lowest mileage possible on the best terms on all these cars. You almost always buy out your exotic lease, unless you bought the wrong car and it tanked. You can lease used exotics so the same rules apply, and you treat the lease as any other loan, except with the benefit of tax deferment onto a dealer. As long as your lease money factor isn't a ripoff, a lease bares very little difference to a conventional loan from a financial standpoint. Another added benefit is if the car gets into a major accident that goes on Carfax (which is devastating for an exotic), you have the option to give it back at the end of the lease, avoiding an even more massive depreciation.
True.
You still get corporate tax deductions on purchases. The other tax benefits of leasing don't outweigh the paper loss, as I explained in the video.
.
Viperguy: you pay sales tax only on the lease payments on ANY lease, no need for a biz/corp/llc. If you then decide to purchase the vehicle, then you owe the remainder of the tax based on the purchase price at that time you buy it.
@@raheeb1 I am talking about the entire lease payment is tax deductible on your corporate pre-tax dollars. If you pay 100K in lease payments that 100K is tax deductible, regardless of whether you buy it out or not.
And PJ lives in Florida and doesn't have to worry about the income tax on the state side, in other states a corporate lease deduction is also a benefit on the state side income tax as well as the Fed. You can't take the full corporate deduction on a standard loan, it has to be depreciated across a five-year term, not based on your payments. So if you keep the vehicle for only 8 months and then flip it, you basically paid full tax for the vehicle, and only got a small business tax deduction. If you would have least it, 100% of all eight months of payments and your down payment would have been corporate tax deductible, also lowering your income tax if you own your LLC, and you would have only paid tax on that small amount. Preaching to the choir here.
With a lease there is something called a money factor which is essentially the interest rate which determines the monthly payment along with the residual. Also with a lease you can purchase at the end of terms and in fact can negotiate that buyout. So if the car is worth more at the end than the payout then you win, if not you give it back. What not mentioned here is the depreciation curve that you also experience with a purchase of a new car so that money is also lost just like a lease. Pros and cons to everything. and more factors to consider than what is mentioned here. Next up is balloon financing.
THIS PERSIAN PIRATE MAKES GREAT VIDEOS 👍
Yarrrrr
This helps a lot. I was about to enter a lease for a Rolls Royce Wraith with Luxury Lease Patners but they want 30% down.
Yeah, please don't do that!
@@ExoticCarHacks After this video I won’t! Lol…Thanks
the way you flammed volkswagon jettas is just hilarious 🤣🤣🤣🤣
nonetheless I learned alot from this episode, the last 3 minutes were filled with priceless knowledge, Thanks PJ! 🙏
Amazing - Thanks for the Lesson
You make it so easy to understand ✨️
Wow that was quite informative, thanks for the video.
great food for thought! Just came across your site as I'm considering replacing my X6 with a newer model X6 5.0. I've thought the Urus or DBX were out of reach though I'm intrigued by the "hack." I'd like to hear your take on if this strategy will differ, be easier, or more difficult in a declining economy vs. the bull run we've seen over the past decade. thx!
I'm curious as to why exotics seem to operate this way.I'm assuming because of the low production volumes of the manurfacturers.
I'm glad I've never leased a car,even though I in the past have been tempted to do so
Low production, high demand
While I agree with him that leases are terrible for the most part, there are times when it does serve its purpose. Most of the things he says about cars appreciating only works in times like now where the economy is good and inflation is dictating the price of used cars. But when shit hits the fan, you don't want to be 200k into a car that everyone is trying to get rid of. The fed is steadily raising interest rates which means people will have to pay way more to get into exotics, real-estate and etc. This is when leasing makes sense because you aren't buying and locking yourself into something that is depreciating like crazy. Since most of the wealth in this country comes from real-estate, when that money stops, you will not see people running out to buy up those Lambo's and Ferrari's.
This time isn’t gonna be like 08
PJ is the Best! Someone please help me. What is the car in the Thumbnail? ❤️
Lease working very well because they are business customer and driver like me don’t take care car and crash a lot
If you crash, always lease
Great one
Well said!!!
What about insurance price when it comes to exotic cars?
Great video but can you talk more about how much you love Lamborghini race seats
Sure
Essentially - buy low (Hack) and sell higher than what you paid for while enjoying your Car. Bottom line , I enjoy the content.
Buy the right car for the right price, not the cheapest version of a car for the lowest price possible.
This is what’s called making money work for you
Never understood why people waste money leasing cars. I understand if its a business vehicle for a write off
If you not buying a limited car there is really no reason to buy. People buying it brand new and they will never make money on it.
Leasing is good for businesses.
Brand new buying is generally also not the answer unless a limited car like you said.
No, leasing is just "less bad" as a business.
fear of some people would be the expense and or repairs needed while owning the car...
Brand New Cars have Warranties
Wouldn’t it be nice if you could lease a used car?
You can, at extremely predatory rates that are front loaded with 90% of the payments going to interest
Would it be better to lease a USED exotic when depreciation has taken place at least little bit and use it with the LLC?
No, because the effective interest rates are super high. At that point just finance it.
@@ExoticCarHacks but the rates being a used vehicle would it be cheaper? Okay so just finance a used one.
🤓🍪