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’07 AW BUYERS GUIDE
easing Your Heart’s Desire
HETHER YOUR DECISION IS DRIVEN BY RATIONAL ANALYSIS OR
RE PASSION, YOU HAVE A CHOICE OTHER THAN BUYING A CAR
LARRY EDSALL
Your daily newspaper, Consumer Reports
a dozen websites can probably tell you
re than you could ever wish to know
ut whether to lease or buy a daily comter-mobile.
We’ll even have a little ade
on that score later in this story.
Basically, the pluses for leasing are lower
nthly payments and/or the ability to
ve a larger/better/more luxurious car than
could afford to buy. The decision has a
to do with money management and the
ails of finance, and requires that you anae
the automobile as a rational purchase.
t let’s face it—many of you really don’t
e a tinker’s or any other sort of damn
ut capitalized cost reduction or residual
ue and could care even less about “The
nstant Yield,” whatever that might be.
But what you want is a particular car, one
’re passionate about driving. The car of
r dreams may have rolled off the assemline
just a few days ago or maybe it was
ilt decades ago.
That’s right, you can lease a collector car,
ether it’s a Duesie or a Hemi, or you can
se that exotic Italian sports car just as if
were leasing a new sedan or crossover
icle, or a minivan or a a full-size pickup
ck. Why, you can even lease a race car!
Regardless of your choice of make and
del, you need to decide whether it makes
se for you to buy that vehicle outright or
lease it for the next 36 or however many
nths. This applies whether your income
50,000 a year, $500,000 a year or even $5
llion (and that’s just your year-end bonus).
d yes, even those who could write a
ck to buy the entire dealership may find
antages in leasing.
Ed Yankowski, managing director of
tnam Leasing, offers a few reasons why
se making the big bucks consider leasing
ir big-buck cars.
First, he says, there are tax considerans.
If you live in California and buy a
0,000 car, you’re looking at 8.25 percent
te sales tax (the national average is 6.3), or
,625 in additional upfront costs. And
st luxury leases are traded in before the
of their lease periods. So what, I’m rich,
you say? Well, consider this:
“Leasing allows them to use their capital
for what they do best, whether it’s investing
or real estate or even for buying other cars,”
Yankowski says.
Why tie up all of that $250,000—or
$270,625 with tax—on one car when, for
that same quarter-mil, you can lease a fleet
of interesting vehicles or put the bulk into
your investment portfolio?
And finally, if you are a basketball player,
an actor or actress, or a business owner, your
accountant could point out the additional
tax advantages of not having a $250,000
vehicle show up on the books, says
Yankowski.
Putnam Leasing has been in business
since the early 1980s, founded, as Yankowski
puts it, “to fill a void in the marketplace
for high-end cars. ” The luxury automakers
either were not offering exotic car leases at
the time or they were making it too difficult
to get out of a lease when the lessee sought
something newer to drive after a few
months at the wheel.
Yankowski notes that perhaps 75 percent
of Putnam’s clients do not keep their vehicles
for the full term of their leases, preferring
instead to change vehicles more frequently.
Unlike the typical dealer’s lease
arrangement, Yankowski says, Putnam’s
leases are set up with turnover in mind.
Lease a Toyota Camry from your local
dealer, he notes, and you may have a deal
that spans 36 months and limits you to
10,000 miles a year. Then, when the lease
is over, you return the car, drop off the keys
and start over again.
But lease a $225,000 Ferrari F430 Spider,
put down $75,000 and take a five-year lease,
and it’s in the agreement that you can swap
that Ferrari for something else. Maybe by
then you want a 599 or a Bentley—with
Putnam’s deals, you can swap into that new
dream car without pesky penalties.
However, he adds, Putnam leases are not
set up like the aircraft-style shared-ownership
programs for luxury and exotic cars that
are springing up in various places. Putnam’s
are lease-to-own contracts, with a lot of flex-
ibility built in.
Putnam leases more than 1000 vehicles
year, ranging in price from $50,000 to more
than $1 million. Putnam offers “all makes,
all models, all years,” Yankowski says. You
can get a 1954 Ferrari 250 Europa or a 2004
Ferrari Enzo.
For example, you want the 250 Europa.
That’s a $650,000 car, Yankowski figures.
Putnam helps you find it, even if it means
going to a collector car auction. “You put
down $150,000 and lease $500,000 over 60
months,” and by setting a residual of, say,
$100,000, “you have a low payment of
$7,000 a month.” If you put the same
$150,000 down and borrowed the $500,000
at 7 percent, you’d have a monthly paymen
of $9,900. Or maybe you could just buy the