Ferrari Lease Purchase

Lease purchase defers an agreed part of the balance to a single balloon payment at the end of the term, set against what the lender expects the Ferrari to be worth by then. The monthly payments fall, often by close to half, and the debt does not go anywhere. It is the car finance most of the Ferrari models on this site are bought with.

The trade is that you carry the risk on that balloon payment. If the car is worth more than the deferred figure when you get there, the difference belongs to you. If it is worth less, the shortfall belongs to you too. That single point is the whole difference between lease purchase and personal contract purchase, and it is why lease purchase is usually the cheaper of the two Ferrari finance options on rate.

On a Ferrari 296 GTB at £241,560, a deposit of 20 per cent at £48,312 and a balloon payment set at 55 per cent of list, or £132,858, give monthly payments of £2,485 over 48 months at an indicative nominal rate of 8.9 per cent. The same Ferrari on hire purchase, with nothing deferred, costs £4,800 a month. The saving is £2,315 every month for four years, and the price of it is a payment of £132,858 falling due at the end.

We arrange the finance and we do not lend. Cases start at £25,000 and are placed with lenders who write car finance of this size on these cars routinely rather than as an exception.

Worked example

Lease purchase on a Ferrari 296 GTB

Car: Ferrari 296 GTB
List price: £241,560
Deposit at 20%: £48,312
Term: 48 months
Indicative nominal rate: 8.9%
Deferred final payment: £132,858
Monthly payment: £2,485

Arithmetic, not an offer, and no lender has seen your case. Computed from the list price using the same calculation as every other figure on this site. Change the deposit, the term or the rate and the payment changes with them.

How the balloon payment on a Ferrari lease purchase is set

From the lender view of the used market for that model at that age and mileage, and from nothing else. It is an estimate rather than a promise, and it is the number worth arguing about, because it moves the monthly payments considerably more than the rate does and it decides whether the finance works at all. Push the balloon payment up and the monthly figure falls while your exposure at the end grows. Pull it down and the reverse happens. On the Ferrari models with a deep used market the lender has real evidence to work from. On the latest cars, and on anything with a thin trading history, the figure is set conservatively and the monthly saving shrinks with it.

When carrying the residual risk is the cheaper side of the trade

On a Ferrari the market can price with confidence, usually. The lender sets the balloon payment conservatively to protect itself, which means the car is more likely than not to be worth more than that figure when the finance ends, and the difference is yours rather than the lender. That is the case for lease purchase over personal contract purchase on cars like these. Where it stops working is on a model with a thin used market, where the deferred figure is set so low that the monthly saving disappears and you have taken on the risk for nothing. We will tell you which of those two you are in before you commit to the finance, because it is the only part of the decision that matters.

What happens at the end of a Ferrari lease purchase agreement

Three options, and all three are ordinary. Pay the balloon payment from cash and keep the Ferrari outright. Sell the car, settle the balloon payment out of the sale proceeds and keep whatever is left over, which on a car that has held its value can be a meaningful sum. Or refinance the balloon payment across a new term, which is common, which we arrange regularly, and which turns a single large payment into a second run of monthly payments on fresh finance. Deciding which of the three you want in the final six months rather than the final six days is the difference between a choice and a scramble, and refinancing the balloon payment is finance that has to be arranged before the agreement ends rather than after.

Lease purchase compared with personal contract purchase

A personal contract purchase guarantees the closing figure. Lease purchase estimates it. Everything else about the two agreements is close enough to identical that the paperwork often reads the same. Under a contract purchase the lender carries the risk that the Ferrari is worth less than the guaranteed figure, and it charges for carrying it, so the rate is usually higher. Under lease purchase you carry that risk and keep any upside. On a mainstream car the guarantee is worth having. On a Ferrari with a settled used market, most of our clients would rather hold the risk and the equity themselves, and the arithmetic tends to agree with them.

What deposit and what term we normally see on lease purchase

Deposits on Ferrari lease purchase usually start at 10 to 20 per cent, and 48 months is the term almost all car finance at this level is quoted against, so that is the term the finance below assumes. Shorter terms exist and they push the monthly payments up sharply. Longer terms exist and they push the balloon payment down, because the lender is forecasting a lower value further out. On a Ferrari Roma at £199,355 a 20 per cent deposit is £39,871 and the deferred figure at 55 per cent is £109,645, giving £2,051 a month. On a Ferrari SF90 Stradale at £419,940 the same percentages give £83,988 down, £230,967 deferred and £4,321 a month.

Which Ferrari models lease purchase suits best

The current models, mostly, because they are the cars a lender can forecast. A Ferrari F8 Tributo at £213,000, a Ferrari 812 Superfast at £270,000, a Ferrari 12Cilindri at £335,000 and a Ferrari Purosangue at £398,000 all have enough trading evidence behind them for a lender to set a deferred figure without guessing. Older cars and classic Ferrari models are a different exercise. On a classic car there is rarely a residual any lender will commit to, so classic car finance is normally written as hire purchase, and we will say so rather than force a lease purchase onto a car that does not suit it.

Using equity in a Ferrari you already own as the deposit

Equity release against an existing car is one of the commonest ways our clients fund the deposit on the next one. If a Ferrari you own outright is worth £120,000, refinancing it can release the deposit for the purchase without touching working capital and without a sale. The mechanics are on our refinance page. The point to take from here is that equity release and lease purchase are frequently arranged together as one piece of work, and that the equity in the car you already have is usually worth more released as a deposit than it is sitting still in a garage.

Purchasing a Ferrari from a dealer, at auction or privately

Lease purchase works on all three, and where you are purchasing changes the paperwork rather than the finance. A dealer invoice is the simplest case for a finance company to work from. At auction the timetable is the problem, because the hammer falls before most lenders have finished reading, so the finance needs to be agreed in principle first. A private sale needs proof of title and a settlement figure if the seller has finance of their own outstanding. All three are ordinary and finance is arrangeable on each of them. The one thing that never works is deciding on the car finance after making a deposit payment to a seller.

What our clients actually use lease purchase for

Cash flow, almost always. A director who could pay for the Ferrari outright often would rather not, because monthly payments of £2,485 against a business that generates far more than that are cheaper than taking £241,560 out of the company. The deferred payment is a deliberate decision to keep capital working rather than a way of affording something out of reach. That is the honest version of the dream car argument. The dream is the car and the finance is a decision about where capital sits, and keeping the dream and the arithmetic in separate boxes is what makes the decision a good one.

Where lease purchase sits among the other Ferrari finance options

Five finance options run across this site and lease purchase sits in the middle of them. Hire purchase is the same car finance without the deferral, at £4,800 a month instead of £2,485. A personal contract purchase is the same finance again with a guarantee attached and a higher rate to pay for it. Business contract hire is not purchase finance at all, because nothing is ever owned. Equity release against a Ferrari you already own is car finance running in the other direction. Most guides to Ferrari finance treat those as five separate products. In practice they are one decision about who carries the residual risk, and every set of Ferrari finance deals you are quoted is an answer to that question rather than to the question of price.

What Ferrari lease purchase deals should be compared on

Not the monthly payment. Every set of car finance deals is built to win on that one number, and the balloon payment behind it is what makes the number possible. Compare the deferred figure, the total paid across the term, the fees and the early settlement terms. Two Ferrari finance deals at £2,485 a month with balloon payments £20,000 apart are not the same offer. No finance calculator will show you that difference, and neither will most guides to Ferrari car finance, because a finance calculator only knows the inputs you gave it and the car finance it describes is nobody in particular. Our tips here are short: ask for the deferred figure first, then the rate, then the fees, in that order, and get all three in writing before making a decision on any of the cars you are looking at.

The questions behind the FAQs on other Ferrari finance sites

What happens if the car is worth less than the balloon payment, and the answer is that you pay the difference, which is the risk you accepted in exchange for lower monthly payments. Can the balloon payment be refinanced, and the answer is usually yes, subject to the car and the business at that time rather than today. Can the finance be settled early, and the answer is yes, on terms that vary by lender. Most FAQs on Ferrari car finance sites answer the first question in a sentence and skip the other two, and most guides do the same. The useful version of that conversation is a short phone call about your own case rather than a page of car finance options written for everybody.