Leasing or Buying a Supercar

Supercars…They’re the cream of the crop – breathtaking, intense, blindingly fast. Absolute masterpieces of engineering and design far greater than the sum of their parts.

Nobody needs a supercar, but there isn’t a single driver that wouldn’t like to have one.

It used to be that Ferrari, Lamborghini, Aston Martin, McLaren, Bentley, Maserati and especially Bugatti only existed in the bedroom posters on our walls.

Today things are different. The exponential advancement of automotive technology has given birth to hundreds of new supercars in the past two decades. And they are more accessible to us normal folk than they have ever been.

If you have fun money to spend, exotic car rental companies will gladly give you the keys to your favourite supercar, or even hypercar. Aventador, 488, GT3 RS, a Regera – everything’s available for hire. There are track day events and supercar clubs which can put you behind the wheel of a different supercar practically every month.

That said, actually having one in your garage is an entirely different ordeal. Dropping down six or even seven-figure lumps of cash on a car that you can’t even drive on a daily basis is still the exclusive hobby of the wealthiest people in the world.

No matter how you look at it, supercars are very very VERY expensive. However, if you’re smart with your finances, a supercar can almost pay for itself. In this article, we’re going to discuss the different ways you can own a supercar, and the pros and cons that come with each.

Getting a supercar on a budget

Look, there are obscenely rich people out there, who can afford to throw hundreds of thousands of dollars on a supercar, or anything else that they want.

If you’re one of them, just pick up the phone and place your order for a brand new white-knuckle Ferrari F8 Tributo, a laid-back McLaren GT, or perhaps Aston Martin‘s first SUV… In fact, you already have and you’re enjoying your fleet of other super luxury vehicles, while your new supercar is being built.

If you’re reading this article, then just like us, you can’t easily write off hundreds of thousands of dollars. You’ve worked hard and have taken smart financial decisions to be able to afford a supercar and the money you spend are not insignificant to your personal wealth.

You can only have one supercar and it has to be the right one – a relatively reliable vehicle that offers the exact driving experience you’re looking for, has the right level of equipment and makes you positively obsessed with it.

However, your new supercar also needs to be a good financial investment. This means painstakingly researching the values and depreciation trends for every vehicle you’re considering to figure out exactly how much money you’re going to lose on the vehicle for the duration you own it.

If you do the math right and have good negotiation skills you can buy a supercar, drive it for an year and then sell it at roughly the same price. You can’t do this with every single supercar on the market, but the right vehicle at the right moment may even fetch you a small profit.

A free supercar sounds too good to be true

Because it is. To get to this point, you need to spend countless hours scouring the marketplace, talking to owners, going to events, and making connections in the industry.

If you want to find the killer deals, you need overarching insight into the supercar market. You better like doing this stuff and have lots of passion for it, because it won’t happen overnight. However, if you’re persistent and stick with it, opportunities will eventually reveal themselves.

Buying a supercar

If you plan on owning your supercar long-term, spending a lot of time behind the wheel, perhaps even put down some lap times, buying it is certainly the way to go. Likewise, if you’re making an investment purchase, with the intention of keeping the miles down and selling it in the future for good profit, then you need to buy it.

However, do you pay cash or finance your new supercar?

You may be surprised to find out that most supercars are financed instead of paid in cash. That’s not to say that the people buying new supercars can’t afford them. However, throwing hundreds of thousands or even millions of dollars at depreciating assets is just about one of the poorest investments anyone can make.

If you have $200,000 – $300,000 to spend on a brand new supercar, you can likely invest it somewhere else and profit more than the interest charges on your loan.

If you have a good relationship with a bank and have an immaculate credit history, you can secure loans with an APR as low as 1-2%, over even close to 0% on specific occasions.

A good investment will yield some 8% – 10% profit on the same sum, which pays for the interest and covers some of the running costs of the vehicle like insurance, fuel, storage, maintenance, etc. Even a 3% margin, after accounting the interest on the loan, will net you $3,000 savings on every $100,000 spent on the car. That’s not insignificant.

When you buy cash, you’re simply locking down that capital until you resell or liquidate the vehicle. It can’t do anything for you, except make you feel good.

Buying and selling supercars can be a pain in the ass

Does buying a supercar on a budget sound like a huge hassle? It is.

On top of all the research needed for picking the right vehicle at the right price in the right condition (if you’re buying used), you also need to sell it. And most often than not, that’s way harder to do.

Of course, some supercars hold their value incredibly well. You can drive them for a while and then resell at roughly the same price, making your ownership cost some ten – twenty thousands dollars for a couple of years.

However, that’s not the case with every vehicle, especially brand new supercars, which depreciate rapidly in the first few years. The supercar market is volatile and prices can change dramatically over a few years, especially if newer models are introduced to make the old ones obsolete.

So, depending on your vehicle, you may have to eat up to $50,000 or even $100,000 of depreciation just to get rid of it. That’s a hard pill to swallow.

Leasing a supercar

So, what if you want none of that – no hassle, no stress and minimal amount of research? What if you just want to have a nice supercar for a few years and then give it back?

You want to have a blast driving it around town, impress some folks, perhaps even pick up a few dates. You’re ready to pay for these pleasures, but you want a fixed predictable price. You want the car under factory warranty and don’t want to spend a single dollar on repairs outside of scheduled maintenance.

Well, that’s when short term exotic car ownership through leasing becomes a viable option.

Leasing is effectively a form of long-term renting. You effectively rent the your dream car for a specific amount of time – usually 2 to 5 years (short term leases on super cars and exotics of less than 1 year rare, and usually extraordinary expensive). The exact residual value of the vehicle is calculated and agreed in advance, so you only pay for the depreciation, plus interest plus tax, plus whatever fees are applicable.

The key here is you’re only paying for the portion of vehicle you’re going to use. You don’t own the car, so you don’t have to worry about reselling it, how well it retains its value or whether it’s in concourse condition.

Leasing comes with a fair amount of benefits:

• Depending on your state, sales tax is often only charged on the monthly payments you make – not the entire price of the vehicle. You can easily save some $10,000 on tax alone.
• If you have a business and use the car to entertain clients or promote your company, you can write some portion of the lease payments and operating costs as a business expense, reducing your tax and effectively saving money on the car.
• While it’s hard (and expensive) to technically terminate a lease, there are a few ways to get out of one early – either by swapping in a substitute lessee or by purchasing and reselling the vehicle at the market. Most leasing companies will try to keep you on as a client, so you may have some negotiation power over getting a new supercar sooner than your lease term allows.
• Whatever happens to the car, it’s not your problem. The leasing company will most certainly require full coverage insurance, as well as GAP, so unless you’ve put money down in advance, you shouldn’t be too concerned with the condition of the car.

Of course, there are a handful of drawbacks to leasing your supercar as well:

• Mileage. All leases come with a fixed mileage allowance. Supercars depreciate proportionally to their mileage, so leasing companies typically set a limit of 5,000 miles per year or less. That may or may not be enough for you. Higher mileage leases can be negotiated, however, expect a steep price hike.
• Options. Supercars are designed with tons of options, giving wealthy buyers the possibility to customize pretty much everything. When you lease a supercar, you don’t have much of a choice. The dealer is going to have a couple of units at most, but usually just one. It’s already painted some color and has a set of options and features installed.
• Modification. Well, you wouldn’t really go backyard mechanic on a brand new Ferrari, but even supercars have room for improvement with things like wheels, tires, body kits. Or even simple things like window tint. All these mods must receive approval from your leasing company, or need to be fully reversible, so you can present the vehicle in its original setup. It gets really expensive, really quickly if you don’t.
• You’ve got to give it back. Maybe you fell in love with your leased supercar. Maybe it’s exactly what you wanted and now you’re looking to keep it. The leasing company will gladly sell you the car, however, it’s always going to be more expensive than if you simply bought it in the first place.

Say you want to lease a Lamborghini

You go to the dealership and you ask for a Huracan. How about a very nice 2017 Lamborghini Huracan LP 580-2?

Just like any Lambo, the Huracan looks absolutely insane. Nobody does wedge cars like Lamborghini. This one is a lighter, rear-wheel-drive only model. The naturally-aspirated 5.2-liter V10 engine sits behind your back and musters up to 572 horsepower, propelling you to highway speeds in less than 4 seconds.

The Huracan is a vicious predator, eager to unleash its raw energy the moment the road opens up. A worthy supercar for any driving enthusiast and you can lease one for $2,425 per month, including tax.

Yes, there’s a down payment. You need to drop down $16,450 out of pocket before accepting the car. This sum takes care of all the fees, the first month’s lease payment and whatever is left goes down as a capital reduction.

The lease extends for 60 months (5 years) at 5,000 miles per year. It’s on the longer side, but you also get a decent mileage allowance for a supercar lease.

The car’s under factory warranty for 3 years with bumper to bumper coverage and unlimited miles. You get half of your tenure completely covered under the factory warranty, which can be extended to cover the entire lease.

Annual service cost is roughly $1,000 – mainly for changing the oil. The brakes are designed to last more than 40,000 miles before you need to swap a new set of pads in. And the tires will last around 15,000 miles depending on how hard you drive the car.

So, the entire lease is going to cost you $159,525. If you want to drive a 2017 Lamborghini Huracan for 5 years and then return it and not have to deal with anything else, that’s the price you have to pay.

Of course this excludes shipping, registration, insurance, fuel, storage, car washes and other running costs you have to pay for anyway, regardless if you’re buying or leasing.

How does it stack against buying?

Looking at the prices, you can buy a used, low-mileage 2017 Lamborghini Huracan LP 580-2  for $192,000. A brand new one starts at $208,571.

Financing this vehicle would cost you about $3,324 per month for 60 months + $13,000 down and an APR of 4%. That’s $900 per month extra for roughly comparable lease and loan configurations.

Sure, you’ll own the car, you can drive it as much as you want and add all kinds of modifications. Hell, you can light it on fire and drive it into a lake if that’s what your heart desires. These perks cannot be matched by any lease deal.

Know what else can’t be matched? Out of warranty repairs.

Supercars cost a ton of money to repair if something fails and you’re not covered. They’re super complicated with preposterous amounts of wiring and electronics, as well as expensive proprietary parts on the mechanical side. Unless you’re a professional mechanic with years of experience working on exotics, you don’t want to stick a wrench anywhere near one.

Lamborghini actually builds some of the more reliable supercars you can get, however, they too will eventually wear and fail.

When you lease, you don’t have to worry about repairs and you don’t have to worry about reselling the vehicle. All you need to do is keep your monthly payments going and enjoy your Lambo. That peace of mind can be way more valuable than money.

Other supercar lease examples

• 2014 Ferrari 458 Italia
  • 60 month lease term
  • 4,500 miles per year
  • $16,500 out of pocket expenses
  • $2,385 per month lease payment
• 2016 Ferrari California T
  • 60 monthslease term
  • 4,500 miles per year
  • $10,000 out of pocket expenses
  • $1,715 per month lease payment
• 2019 McLaren Senna
  • 60 month lease term
  • 100 miles per year
  • $221,500 out of pocket expenses
  • $15,125 per month lease payment
• 2016 Pagani Huayra
  • 60 month lease term
  • 100 miles per year
  • $623,000 out of pocket expenses
  • $44,305 per month lease payment
• 2019 BMW i8
  • 36 month lease term
  • 10,000 miles per year
  • $4500 out of pocket expenses
  • $1,173 per month lease payment
• 2008 Bugatti Veyron
  • 60 month lease term
  • 600 miles per year
  • $415,500 out of pocket expenses
  • $29,000 per month lease payment

How supercars depreciate

In the end, most supercars are just…cars. They are depreciating assets, which start losing money immediately after driving them off the lot.

Of course, not all supercars are equal. Different manufacturers and models depreciate at a different rate.

In fact, some models actually appreciate over time. Flagship hypercars and special edition supercars often begin appreciating the moment they get released. Usually, by the time the manufacturer announces these cars, they have sold out either the entire production run, or most of it.

Low volume manufacturers like Koenigsegg and Pagani observe immediate appreciation on almost all of their cars. Because of their scarcity, revolutionary technology and record-breaking performance, these cars are highly sought after.

People with unlimited resources can afford to pay double or even triple for the car nobody else has, therefore the prices skyrocket. In fact, to prevent such scenarios, most manufacturers have established a rule that buyers of their flagship cars must retain ownership for at least a few years.

Legendary poster cars from the past like Ferrari F40 or Lamborghini Diablo also appreciate consistently over time.

With that being said, regular production series supercars will almost always depreciate and heavily so in their first few years out of the factory.

Regardless if you’re leasing or buying a supercar, depreciation is always going to be your biggest expense. Therefore, in order to make a good investment, you need to look for the supercars that depreciate the least for the period you plan on keeping them around.

Ferraris and Lamborghini supercars retain their value better than most other

For example, the 2015 Ferrari 458 Italia came with a base price of $234,000, but realistically at least $250,000 when you order the most essential options. Today, clean examples with less than 10,000 miles on the odometer go for around $200,000.

That’s a depreciation of 20% for 5 years, or $10,000 per year on average. Fifty grand may sound a lot, because it is. However, considering the price of the car and the time it took, it’s extremely good. Just the fuel, insurance and consumables will come at roughly the same cost every year.

In 2012, the first generation Lamborghini Aventador LP700-4 went for around $400,000 depending on options. Eight years later, the same model still fetches $250,000.

That’s 37.5% depreciation over 8 years, or $18,750 per year on average. Yes, that’s an entire Huracan lost, however, consider this a fair price to own one of the world’s fastest supercars and one of the last great naturally-aspirated V12 engines.

McLarens and Aston Martins don’t stand the test of time

In 2015, a brand new McLaren 650S Spider came with a base price of $280,000. Most buyers added at least $20,000 worth of options, so let’s round that to $300,000.

A 2015 McLaren 650S Spider with 8,500 miles is on sale, right now, for $150,000. That’s 50% of depreciation for 5 years, or $30,000 per year on average.

Other models like the 570S and 720S are also depreciating in a similar manner. That’s not to say these cars are any bad.

McLaren produces magnificent supercars. They’re drivers’ cars, which put performance first and everything else second. The combination of carbon-fiber monocoque construction, mid-mounted twin-turbo V8 engine and dual-clutch transmission driving the rear wheels results in lightning quick acceleration, razor sharp handling and jaw-dropping lap times.

McLaren found a golden formula and perfects it with each new iteration. However, their best feature is their biggest failure when it comes to long term value. Every car is essentially the same with the formula tweaked a little bit. The company makes its own supercars obsolete by unveiling a faster version every other year and letting everybody have one.

Nobody who can buy a new McLaren will buy an older, slower, technologically-inferior model. Add to that the significant costs of consumables, maintenance and eye-watering out-of-warranty repair bills. Finally, the nail in the coffin for used McLarens is the company’s reliability issues with some of the earlier models. Those are pretty much resolved in recent years and new McLarens are just as reliable as most other supercars. However, the bad rep has already settled in and it will take years to clean up.

The McLaren 720S is arguably the best bang for buck supercar you can buy, offering world-class hypercar performance in a phenomenally refined package that costs $300,000.

Today, a 2018 McLaren 720S goes for $240,000. That’s 20% depreciation for 3 years, or $20,000 per year on average.

What saves the 720S from a fate similar to its predecessor, is that McLaren has pretty much ironed out all the imperfections and there’s nothing that strictly replaces the 720S, yet. We’ll give it a couple of years more to see how it’s value holds up on the 5-year mark.

Aston Martin’s 2017 DB11 V12 Coupe arrived on the market with an MSRP of $212,000 and big intentions to dominate the GT market. Today, you can find one for $130,000. That’s a value drop of 38.7% over 4 years or a depreciation of $20,500 per year on average.

Porsche and Audi hold their values most successfully

A second-generation 2017 Audi R8 V10 would have set you back $164,000 brand new. Today, you can find a relatively low mileage example for $130,000.

That’s just 20.7% depreciation over 4 years, or $8,500 per year. The baby Huracan holds its value incredibly well.

In 2018, new Porsche 911 Turbo S prices started at $190,700 MSRP. You’ll be hard-pressed to find one for sale under $160,000, with many vehicles offered close to their original price.

We’ll assume an average price of $170,000. That’s a depreciation of just 11% over three years, or just $7,000 per year.

Note: All figures above are based on MSRP and current prices across online marketplaces. Most supercars and practically every hypercar are ordered to spec, including colors, materials, equipment, tech features and performance enhancements. This means that their starting prices can be up to 50% higher than MSRP.

Usually, first owners need to write off most of the options they paid for. There’s value in customizing your car to match your taste or the color of your company logo. However, these extras hold little value for the next owner, who may or may not like or even want them in their car.

Why do supercars depreciate so much?

You’d imagine that these advanced machines with cutting edge technology would hold their value better than your run off the mill economy daily driver.

You see these huge five-figure sums being lost in just a couple of years. However, percentage wise, they’re doing far better than regular cars.

On average, regular cars lose 9% of their value immediately upon driving them off the lot. By the end of the first year, they lost some 20% of their value and after five years, they’re only worth half their original price.

Depreciation is always highest in the first three years after purchasing a supercar (or any new car, really), after which it slows down and often plateaus after 4-5 years.

The bottom line

As evident from the market, there’s plenty of ultra-rich people who just want the newest, hottest supercars and couldn’t care less how much they lose. If you’re looking to get the most supercar for your money, it’s always best to go after 2 to 4-year-old models with low mileage and good maintenance and service history.

Leasing and buying supercars have their benefits and drawbacks. Which one is right for you primarily depends on what you’re looking to do with your supercar and how interested you are about joining such a dynamic industry.

Just remember that supercar deals – whether lease or loans – are highly individual and will be influenced on a variety of factors impossible to predict. Finding the right opportunities will take time and effort, but it can save you eye-watering amounts of money and put you into a vehicle you normally may not be able to access.

If you’re looking to get your first (or next) supercar, don’t hesitate to contact Below Invoice and tap in our experience procuring the world’s finest luxury and exotic vehicles.