| Author | Message | ||
| paul s (Pes236)
|
dear dave - if you look at the dates of these post this entire conversation had been on the 7th or earlier - prior to the recent tragedy - plus i do not feel that conversations or our lives should competely stop because of this - that statement does not appy to anyone directly affected by this tragedy, im sure people who lost a friend or loved one have more important things to talk about than cars, financing, etc. The american dream does still exist, house, family and ferrari | ||
| Martin (Miami348ts)
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I guess recent events have brought life into a different perspective. | ||
| Rob Lay (Rob328gts)
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I agree! | ||
| Dave L (Davel)
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In light of the current events, who cares if you paid cash or financed. Do what you want when you want if its right for you as far as purchasing. Just get it, enjoy it and drive it. Who knows if tomorrow you will be a target and dead. Im glad I dont have all that much money in the world where I have to debate and worry about a quarter point of interest if it makes financing land over a Ferrari relevant. Do what you like and live. Life is too short for this debate. | ||
| paul s (Pes236)
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martin - glad we came to some kind of understanding - guess my point was keep your cash available ( money market 4% ) so that you can readily use it for investments like investment real estate or a good stock ( which may pay a good dividend as a bonus )And i guess my view is from someone with a better than average income but not a multi multi millionaire - Bill Gates go ahead pay cash you have my blessing | ||
| nick l (Nsxnick)
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you have 30k+ in cash to spare at 24? lucky you. | ||
| Leo (Speedracer)
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screw it, I'll pay cash... | ||
| Martin (Miami348ts)
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Speedracer is confused? Maybe, but I am too.... You will be getting the tax advantage on your loss that you created buy borrowing money from the bank at 7.5% and putting is back into a savings at 4%. That loss is indeed only 65% of the 3.5% difference, or $65 as in your example. .....wait, I just re-read your earlier post. Sorry now I get it too. You are right of course. Talking about confusing.... Sorry Speedracer. Just get the car and do not worry. The good thing, ever month you write the check to the bank you really did not lose any money! Sorry for the confusion Paul. About the tax write off: Track events, gas (the usual) repairs (percetages) and stuff can be deducted. I have a good accountant for that. Legal mind you. | ||
| paul s (Pes236)
|
Considering that i just got on - I saw that my post created a lot of discussion - Thank you to all that defended me !!!! Next thing is I would like to point out a couple of things that I believe that martin you may be incorrect on. # 1 my home was paid for before I took the H.E. loan to buy the 355 spyder . So this is a first mortgage on my home thus I believe fully tax deductable. # 2 If you are earning interest in the bank 4% and you are paying 7.5% on a H.E. loan as far as the federal goes they cancel out - Say you earned $ 1K for the year plus 100 in interest total income would be $1100 Paid $ 200 in interest on H.E. you can deduct that which gives you a taxable income of $ 900 thus the 100 in interest earned in the bank cancels out with half of the 200 paid on the H.E. so the extra 100 paid on the H.E. really is only like $ 65 because if you didnt pay that $100 on the H.E. you would have that $100 in your hand until April 15 when you would half to give $35 to uncle sam thus leaving you with $65 on April 16. # 3 if you want to talk about by the book - NO WAY can you deduct your 348 for advertising for real estate. First of all vehicle depreciation is limited to roughly $3600 a year for all vehicles under 6k pounds and if you have company logo or sign on vehicle - still limited to $ 3600 for 5 yrs and you can deduct the sign as advertising - now that I read what I wrote maybe what you merely meant was you write off what you can for the ferrari - ok - but it came across like you write of the entire thing - Ya know, the poor guy who started this thread merely wanting a suggestion on how to best finance a ferrari is probably confused as hell | ||
| Martin (Miami348ts)
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 | ||
| Rob Lay (Rob328gts)
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um um um, I'll get back to you on that one. They might of not included it in the upgrade. | ||
| Martin (Miami348ts)
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what happend to that spell check Rob? | ||
| Martin (Miami348ts)
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...bud stil cann't shpel. | ||
| Martin (Miami348ts)
|
Think of it from the logical point of view (okay that does not work with the government). Why would the government allow you to deduct interest for your house that is not borrowed for your house (homestead? Now technically nobody at this time seams to care about that and it is silently acceptable practce, but it still is wrong. Steve you may be right on that as well. It does not make sense but hey, what does nowadays! As I said, consult your accountants on that! The HELine I have available on my house since 5 years has never been touched. It does not make sense to me to overextend myself on my house that does not make any income. I see this more as a reserve that you have just in case things go bad and that will not force you to sell of the Ferrari once you are unemployed for 2 weeks without pay. I must say I bring a very conservative approach to how to manage money. It has been very good to me, making me a multi millionare in a matter of 7 years from $5000 I had when I came in this country. God bless America! | ||
| Bill Shumaker (Gabriel)
|
Geez guys. - I need to hire some of you to manage my finaces now that I've booted my options broker  ....... - Personally, I paid cash, but I could never afford to do that on a new Ferrari. I never did buy it as an investment though. - I just love the TR and the Ferrari mystique. | ||
| Steve Magnusson (91tr)
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Correction -- should have said "basis" not "value" per: http://www.foxnews.com/story/0,2933,33413,00.html | ||
| Steve Magnusson (91tr)
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Martin -- my understanding is that interest paid on home equity loans is also deductible for primary residences (here in the US) as long as the total amount financed on the property (1st + 2nd + ... + HE + ...) doesn't exceed the value of the property. Same rule would still apply, I believe, if you only had a 1st -- it's just that you really can't get a simple 1st that exceeds the property value so that problem never comes up. I have seen several articles that describe this (and my own tax prep firm didn't bat an eye over including my HELOC interest deduction) -- can you give an independent reference for your description of the rule? (or perhaps your description is for investment properties?) | ||
| Gene B. Radcliffe - 308 GTS (Brcbank)
|
Martin, Just a slight correction on interest deductibility, as I understand it. The interest on the proceeds of a mortgage on your main home or a second home is deductible regardless of the purpose for which it is borrowed (including a Farrari) or the number or type of mortgages, up to $100,000 in borrowing. Interest on mortgages up to $1 million used to buy, build or improve a home are deductible. There are other limits on loans in excess of the fair market value of the property and general limits on the deductibility of itemized deductions. After the second home the loan is considered investment interest and the use of the proceeds may have to be related to the real estate and is subject to other requirements. As a banker I express no opinion on the wisdom of borrowing generally! It really depends on the totality of the circumstances. | ||
| Rob Lay (Rob328gts)
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Martin, actually, mine isn't a home equity loan, it's really a 1st mortgage. I think that's why I can deduct. | ||
| Martin (Miami348ts)
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DAmn I am good, I should write a book about that! | ||
| Martin (Miami348ts)
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Frank, the question for me is never if I buy a car or a property. The question is, when buying both, are you taking your cash on hand to buy the car and finance the property at 11.5% or buy the property minus the loan on the car, hence reducing your LTV on the property and buy the Ferrari at 1.5% less. As I am dealing in income producing properties they all make me money, more than the interest on borrowed money or at least equal. There is no tax deduction possible for me as they are held in corporations. I deduct the Ferrari as well from my taxes. It is an advertising tool and good for promotions. Paul; on your home equity loan you have to be carefull. Talk to your accountant. If the money borrowed on the HEL is not used for real estate improvements or related to the home it is borrowed on you can not claim this on your W2 as interest which can be deducted. I know it is common practice, however sticktly by the book it is false. This is why the ads say MAY be deductable from your income tax. Paying a credit card for example is NOT tax deductable, unless the purchases on the credit card were for home improvements. Buying a Ferrari on your HEL is not a deductable option. If you hold your money in a CD and make interest you have to also declare your interest earnings from the CD as income. This will higher your base and in fact you may reduce that bade down by your interest you paid but the gap does not more either way. So no you are not just losing 65% of the gap, you are losing the full 100%. | ||
| paul s (Pes236)
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home equity - mine 7.5% - kept my money earning 4.0% in money market acct. which means the out money is 3.5% - considering its a home equity its tax deductable so my actual out of pocket money is roughly 65% of that 3.5% which equals roughly 2.25% for 15 years. so now I have my money in the bank and my ferrari and of course my loan. I believe that this is the way to go 2.25% for 15 yrs cant beat that - and lets say in 2 yrs the economy turns around, CD rates go back above 6% then you are even in a better position,( after dax deduction less than 1 % a yr ) maybe stocks turn around and you use your still available cash to buy stocks and end up getting your ferrari for free - heck yesterday I bought 500 more shares of csco and intc - got my fingers crossed - and if your talking about a 308 or mondail - 30k car - | ||
| Frederick Thomas (Fred)
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My Ferrari is appreciated everyday. How much better return on your investment can you get then that? | ||
| david schirmer (David)
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OK Rob, it looks like you paid attention at the old alma mater. I myself vote for "pay cash". It's clean and neat and you don't have to calculate interest rates, ROI, present value and all that other stuff that I wasn't too good at. I do think that Frank has a point about financing appreciating assets. The question remains whether a Ferrari is an appreciating asset. I know I appreciate it...... | ||
| Rob Lay (Rob328gts)
|
Jim E, because I lie. Actually, I've had good luck lately technical trading. I don't recommend it, but I've had better luck trading off the chart, instead of the income statement. Frank, yes, I like the FML and analyze every issue. I agree with you, there are only a hand full of investment Ferraris and all the others you hope remain somewhat stable, but they'll never keep up with inflation. Wow, that just gave me a good idea for another posting... Look for "Pick Top 3 Future Depreciators and Appreciators" | ||
| Frank Parker (Parkerfe)
|
Rob, most Ferrari depreciate though at a slower rate than ordinary cars. There are a few exemptions but they are rare. Even when you look at say a 365GTB4 Daytona. It cost around $21,000.00 new in 1970 and is now worth around $95,000.00 or so. If you calculate the current value of 1970 dollars, you still lost money if you owned it for the whole 31 years. But, you would have got the enjoyment out of the car. Check The Ferrari Market Letter for the ever changing value of Ferraris. It is the Holy Grail of guides for Ferraris respected world wide. See www.ferrarimarketletter.com | ||
| Jim E (Jimpo1)
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Hey Rob, can you tell us how you're earning 6.5% in THIS market? :-) | ||
| Rob Lay (Rob328gts)
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#1 - Not all Ferraris depreciate, most actually have been appreciating. #2 - Anytime you can borrow at a lower rate than your ROI, then you're better off. For example, my loan is 6.35%, plus I can deduct the i from taxes, and my investment money that would of gone into the car is now earning me more than 6.5% in the market. I'll borrow money all day long if I can invest it for a greater return. | ||
| Christiank (Christiank)
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Financing is fine but some people finance because they calculate and some people finance because they don't have the money. Personally I think financing is OK if you are willing to pay the credit down at a fast rate to a level where wholesale for that car is. Example: You are considering a 89 328 for 55 K, wholesale (low)in one year is about 35. Your rate would be 55 minus 35 plus 4,6 K for interest (10 %) equals to USD 2,050 / month. If you can't afford that, better let it be. Just my 2 cents, Christian | ||
| Frank Parker (Parkerfe)
|
Why would you rather finance a depreciating car than property that appreciates and you earn income from ? You get the tax break from the income producing property but not the car . Hence, you would be much better off to pay cash for the car and finance the income producing property. | ||
| Martin (Miami348ts)
|
Frank, I beg to differ as well. I am a FCA member and do finance my car. Why? I find that I am better off paying down some of my mortgages at 11 and 11.5% for properties than paying cash for my toy and basically borrowing the money for much more. In my business it is a numbers game. If the bank offers me 10% for the car and 11.5% for a property I will take the money and pay down the 11.5% and take the 10% on the car. Numbers only! Now I think the point you are malking though is more like do not buy a Ferrari if you will have to eat Campbell Soup to own it. There I agree. Maybe the FCA members are not as sharp with the numbers as I am...? Maybe they do not care..?! I do, I earned my money too hard to just let the bank take 1.5% for nothing, just so I do not finance my toy. FCA cost in out region is $120 and frankly not worth it. There is too much political sh*t going on and not enough fun. I'd rather be meerting and riding with people like Rob who still enjoy their cars and ride them because of pure joy and enthusiasm, than some stiffs at the FCA that have to bring their cars to the Ferrari dealer to change the light bulb. I have been to an official FCA event and was not impressed. Neither were a lot of people that I know with Ferrari. Too little respect for the cars and too much ego floating on the events. Any let me make that point, there is exceptions to the rule! sorry for my long reply. Pls do not take this as a personal attack, has nothing to do with you, just my 2c. | ||
| Frank Parker (Parkerfe)
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The FCA cost a whomping $90.00 a year to join and includes the monthly FCA Newsletter and the quarterly subscription to Cavalina magazine. Hardly an expensive club to join. | ||
| Frank Parker (Parkerfe)
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The FCA cost a whomping $90.00 a year to join and includes the monthly FCA Newsletter and a subscriptionn to Cavalina magazine. Hardly an expensive club to join. | ||
| Frank Parker (Parkerfe)
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The FCA cost $90.00 a year to join and includes the monthly FCA Newsletter and a subscriptionn to Cavalina magazine. Hardly an expensive club to join. | ||
| Rob Lay (Rob328gts)
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that's the problem, you're in the FCA and multiple Ferrari owner crowd... nothing wrong with that, but it's a different world than us commoners who have more passion than money. | ||
| Frank Parker (Parkerfe)
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I beg to differ. I have owned 5 Ferraris over the last 12 years and have been a Ferrari Club of American member during that time frame. I have known of only a few people who financed their Ferrari out of all the Ferrari owners I have had the occasion to know. | ||
| Rob Lay (Rob328gts)
|
I agree Frank that you shouldn't finance a toy, but to some people Ferrari isn't a toy. Like anything in life, you have to consider how important something is to you and what you'll give up to have it. The costs on a Ferrari aren't that great if you consider the low depreciation. The market would crash out on the less than $100k Ferraris if people didn't finance them. I would guess 40-60% of Ferraris in this price range are financed when bought. | ||
| Frank Parker (Parkerfe)
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Never finance a toy ! If you can't pay cash, you can't afford it. Period. No exeptions. | ||
| Dima Efros (Defros)
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The first place you should try is Peoplefirst.com. They will give you an answer within a few minutes. | ||
| Martin (Miami348ts)
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got mine from my bank. They always ask me if they can not finance anything for me. 1991 but I am paying 10%, because of the age. Can get 7 1/2 for a new one. | ||
| James P. Smith (Tigermilk)
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I second peoplefirst.com. They don't care what year, make, or model, and the rates are pretty good. My bank, with whom I've done business for over a decade, said I could get a personal loan at the low rate of around 12%. PeopleFirst could do 8.5% with no questions asked. | ||
| Ron Dallas (328infoseeker)
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Try Peoplefirst.com | ||
| Rob Lay (Rob328gts)
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home equity loan is the best, but check your Forza or Cavallino for those that specialize in classic car financing. you'll be disappointed when you find out how high the rates are. | ||
| Leo (Speedracer)
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where can i get a good rate on financing a ferrari? |