| Author |
Message |
david schirmer (David)
| | Posted on Thursday, June 14, 2001 - 11:36 pm: | |
I was thinking about my earlier words of wisdom and I realized that I am an idiot! If we don't encourage people to take out huge loans to buy Ferraris then there will be no market. People won't be able to afford exorbitant prices for these cars and we will have to wait for some cash buyer with a few thousand bucks to buy our car. So take out a loan, borrow from your dad, get an advance on your paycheck, cash in your 401k. Buy a Ferrari for any price NOW!
David (It's the Chianti talking...) |
Tim N (Timn88)
| | Posted on Thursday, June 14, 2001 - 9:10 pm: | |
Wow. alot of people from the NY tri-state area. That makes 3- Bret, William, ans Steven I was just looking at Steven's profile, i live in Pleasantville. (10-15mins) |
Steven J. Solomon (Solly)
| | Posted on Thursday, June 14, 2001 - 9:06 pm: | |
Whoa-slow down with the deductibility option. Even if you own your own business (I own several), you can ONLY deduct interest and take depreciation on the portion of the Ferrari used EXCLUSIVELY for business. If you use your car to commmute to and from work this does not count. If you are a traveling salesman and must have a vehicle to travel, that portion spent on traveling to sales calls is deductible, and if you use it to deliver pizza, that is also deductible. You must also prove that you own another vehicle for personal use if you claim 100% of the intererst and depreciation. Deductibility of interest and depreciation should not be the motivating factor in your decision on how to pay for a vehicle. They are only icing on the cake, if applicable.
There are also upper limits on the value that may be claimed for any car- I'm not sure what they are these days. My father spent many years as an IRS auditor looking for precisely these types of deductions on tax returns. Check with your accountant first.
Having said all the above, and having come to Ferrari ownership the hard way (not a beneficiary of the sperm lotto), I must agree with the previous postings that this is essentially a luxury item, and should be paid for in unneeded cash. I would not take a used car loan out for one, but I might borrow against a home provided that I had plenty of equity, and the monthly payment was essentially meaningless. This route does allow some tax-advantaged treatment of the interest paid on the home equity loan. Again, check with a good accountant.
There will still be Ferraris for sale when you are ready. Good luck. |
Herbert E. Gault (Irfgt)
| | Posted on Thursday, June 14, 2001 - 8:37 pm: | |
Don't tell all our secrets!!! I have the only Italian shop vehicle around, with the fastest delivery time of anyone. |
Arnaldo Torres (Caribe)
| | Posted on Thursday, June 14, 2001 - 5:21 pm: | |
If you are lucky enough to have your own business like some of us, then you can deduct not only the interest you pay on that loan, but the maintenance and repairs as well. In fact, you can even deduct some upgrades too, such as a new exhaust, etc. In addition, you also get the additional benefit of the car depreciation which should save you about $3K/year for the first five years. By the way, if the vehicle weights 6000 Lbs or more (SUVs, etc.), you can deduct up to $12500/year in depreciation alone (unless it changed with the new laws this year). Talk to your accountant for the official scoop, and strategies.
Caribe. |
Rob Lay (Rob328gts)
| | Posted on Thursday, June 14, 2001 - 9:17 am: | |
I got a loan for the Ferrari, but I made the sacrifice to not buy a new car when my '93 BMW was paid off. The BMW is still a great car and I plan on putting another 50k miles on it.
For the loan I went the home equity route. The downside is the upfront fee, in my case about $500. The upside is a 6.35% interest rate and having that tax deductible.
All a matter of priorities, many passionate Ferrari people put the car ahead of almost everything else. Some people just make it icing on the cake. |
chris cummings (Entelechy)
| | Posted on Thursday, June 14, 2001 - 9:12 am: | |
Thanks guys, wise words. I might be overextending myself at this point, and your latest thoughts added confirmation to that. I've researched nearly every thread in this site and others and feel confident I know what I'm getting into. Your counsel helps to take the pressure off and let pragmatism supercede emotion/desire. At the very least I'll be making a well-informed decision.
Thanks again,
~Chris |
Michael A. Niles (Man90tr)
| | Posted on Thursday, June 14, 2001 - 7:20 am: | |
I agree but from a fiscal point of view, if one has many other assets (excluding primary home, secondary homes, first, second and maybe three cars, bank accounts and stocks portfolios for you and the kids, and complete insurance packages) you can take the chance and do the loan and invest the money elswhere. Or you can borrow against an unused asset. The key is you should be able to get your hands on the amount for the car in 24 hours or less without any change in your life situation.
This is really no different than what Herbert and David said -- the point is Herbert says money laying around but assets that are rarely used is just like money laying around. If you have assets like that you can loan against then that's fine on my book. -- BUT it must be something that if lost it doesn' matter. Which after all is David's and Herbert's point.
The other point is spend the money and take out a full agreed value insurance policy on the car. If someone hits you at least you get all your money back. That is probably the biggest risk you have. One more thing -- include in your loan 5000 - 7000 dollars for major engine work reserve. You really have no idea (even with a good pre-purchase inspection) if your engine or a major part will break in the next 6 months to a year. HAVE that money ready!!!
Good luck and be careful not to over spend yourself -- that can too easily be done with Ferraris. |
Herbert E. Gault (Irfgt)
| | Posted on Thursday, June 14, 2001 - 6:01 am: | |
I second that motion. A Ferrari is what you buy when you have everything else and have money laying around that you want to throw away. |
david schirmer (David)
| | Posted on Thursday, June 14, 2001 - 12:03 am: | |
Not to be flip, but have you considered paying cash? I am a bit old school here but loans should be used for purchases that will increase in value and you need the money at this instant in time or you will miss the opportunity. A college education, a house, a business would fall into this catagory. A year or two ago, the case could be made for investing cash in the stock market and taking loans for everything else. Ummm, well let's hope nobody got in too deep. Anyway, maybe a primary car that gets you to work and enables you to earn money would fall into a reasonable argument for borrowing money. However taking a loan to buy a Ferrari might fall into the catagory of fiscal irresposibility.
If, however you are just going to throw your life away and pay the man, then consider a home equity loan and get some tax advantage out of your Ferrari ownership. And, what the heck if you default, you just lose your house.
David (who has seen people lose everything and now pays cash for just about everything he can) |
chris cummings (Entelechy)
| | Posted on Wednesday, June 13, 2001 - 3:39 pm: | |
Thanks Doug - great tip. I'm waiting to see if I qualify, but their rate and monthly payment were exactly what I was hoping to find. There's just complications as I work in feature films and as such, am often on location and working for different studios (so I have a lot of temporary addresses and different employers - nothing long term). Could nix the deal, but I really appreciate the lead.
Thanks Chuck - my credit union bases the rate as explained earlier, but thanks for the thought (I purchased my first vehicle through them).
~Chris |
Doug Meredith (Doug308)
| | Posted on Wednesday, June 13, 2001 - 1:52 pm: | |
If you have very good credit, goto Peoplefirst.com. Ten minute approval and they send you a blank check up to a pre-approved amount. You have 1 month to use it and when you do, that is when the loan starts. I used it when I bought my '84 Ferrari in January and the rate was under 9%. The only criteria they went by were: new or used and purchasing privately or from dealer. Buying new saved .5% and from a dealer saved .5%. My personal bank of 7 years would have charged me 13%. |
Chuck Rine (Chuck348ts)
| | Posted on Wednesday, June 13, 2001 - 1:26 pm: | |
Chris, Are you eligible to join a credit union? My credit union offers the same rates for all used cars from 1-24 Months 6.99%, 25-60 Months 7.99%, and 61-84 Months 8.99%. They don't care how old or what type of car, but will not lend more than 100% of the NADA "average" classic car value for exotics. Only disadvantage is that sometimes the NADA value is way low. Other CU's might offer similar deals since they are owned by their members and are non-profit. |
chris cummings (Entelechy)
| | Posted on Wednesday, June 13, 2001 - 1:04 pm: | |
Hey Guys,
I'm researching auto loan rates and am appalled at how high the interest rates are for 80's Ferarri's. They calculate the interest rate by the date of the car. Has anyone found any place that specializes in collector cars and exotics which offers a decent interest rate? The other rub is that while I have excellent credit, I've never borrowed much because I am finacially responsible. As such, they still up my interest rate because I don't have a lengthy credit history! Amazing. Any help you guys might have (as I imagine I'm not the first to deal with this issue) would be much appreciated. Thanks in advance!
~Chris |
|