How to Buy a $1,500,000 Car

According to the multimillionaire buyer of a Bugatti Veyron interviewed for this NY Times column, it's smarter not to pay cash:

Why would [financier Timothy S. Durham] submit to the paperwork and other obligations of leasing when he could simply write a check for the full amount?

In Mr. Durham’s case, there were two important benefits: he had other uses for the money and, by stretching the payments over several years, he could put off paying some of the sales tax. For a car in this price bracket, taxes alone can run to $130,000 or more, depending on where the deal is struck.

“One of the biggest things is you’re deferring your tax because the sales tax is getting stretched over some period of time,” said Mr. Durham, whose investment firm, Obsidian Enterprises, controls several industrial companies as well as National Lampoon.

Although he expects to buy the Bugatti by the end of the five-year lease term — at an additional cost of several hundred thousand dollars — Mr. Durham said he would rather invest the difference in the meantime. He also said he expected that in coming years the Bugatti would be worth more than he has agreed to pay for it.

The companion review in the Times notes that the Veyron is the world's fastest production car. Nevertheless, half the initial production run of 300 vehicles remain unsold.

One possible reason: The Bugatti brand is being revived by Volkswagen. Although VW also produces Bentleys, it's still thought of as a mass-market manufacturer.

VW's problem is not unlike the challenge facing a mass-market bank when it launches a wealth-management unit catering to people of ultra-high net worth.

P.S. For the price of a Veyron, you could buy ten Audi R8 Quatros.