Did you finance your car, or save up for it? I saved up for mine. I spent about half of my cash (excluding equities like, shares, bonds, real estate etc.) I am not an investor, and my money was just sitting in a bank account with 0.25% interest, in a country where there is 0% inflation (live in Switzerland) I know the car will depreciate in value, and that I will spend thousands just owning the car, and may end up spending a Toyota Yaris in repair bills, but I can´t think of a better way to "invest". Sure, it will sit in the garage most of the time, but that is ok. It is a a piece of art, just looking at it gives me pleasure. Financing is also a viable option, you can get rates as low as 1.9% (again, I am in Switzerland) and put your money in an index fund, or something that is relatively safe and has historical returns way above 1.9% (not to mention 0.25%).
I financed about 65% of mine. I kept the remaining in a separate account. I had a couple of big jobs coming up and I sometimes finance them for my customers. My season of major jobs is about done so I will be paying off the car in about 2 months. I think I got 2.9% financing.
I financed a good part of mine at 1.74%. Almost free money. No point tying up cash that can yield a much better return.
In this interest rate environment of 2-3% home equity rates it probably does make sense to finance especially if you get a tax deduction on your loan. Figure the deduction takes 30% off of the rate and you're paying back with cheaper dollars (1-2% inflation) and it is really free money... then invest the $100k otherwise spent on a 360/430 for a 5% return. The numbers support it!
I financed mine for a 5 year note. Paid it off in 4. No use not taking advantage of a 2-3% loan when you can make 4%+ in a dividend.
I was going to pay cash, but the interest rate was close to 1% at the dealer, so I borrowed about 20% of the cost of the car. I figured it might help build a relationship with FNA, no need to tie up extra cash that I could easily come up with to pay it off at any point, and the rate was so low.
Well there are two sides of the coin here, I totally agree with the idea of "never finance a hobby" but Ferraris (maybe not the 360, at least not now) could go up in value so the "hobby" could become an investment, but with rates that low the second statement is true "it is free money" so I guess that only works when the rates are low. My way of seeing it is "if you can buy cash but you prefer to put that money in something that will give you a higher yield than the interest rate you will pay, then do it" BUT if you need to finance a hobby because you CANT afford it, that is a formula for disaster, because if something happens you would be in a terrible financial position. Kind of "leveraging" you would be in some kind of a "ferrari margin call" and you would have to sell at a discount therefore losing money.
This comes up every so often. Several will say, only pay cash. Other will say, live your dream and do what you want. Still others will point out the potential for leveraging the money in investments. Rinse, repeat.
I think it's because many wants others to think they are doing better than they really are . Many regular joes are buying their dream because it's within their means now. With sure low,rates and if they repairs won't kill you why not . I got 0% on wife's daily driver so why not . Free money
Is it time for this thread again? The question has been asked so many times, check through a search. Results are the same, do what makes most sense / is right for you.
I literally pay cash for everything. There is a certain peace of mind of not being indebted to anyone that allows me to sleep well at night. I funded cars through investment returns in order to pay cash. Invest first, buy with cash later. Sure, there is additional lost investment opportunity by not borrowing at historically low rates. Also consume less: if you can't drive it, eat it, drink it, or sleep with it, you probably don't need it. Sent via itty bitty electrons
So if you wanna pay cash for these cars how do you build credit? Not just credit but you do want paid high loan amounts on your history in case you wanna buy X item.Are you gonna be paying a house cash too? To me credit is super important.
I got finance for my CS. I would have never been able to pay cash for it. Life is short, it makes no sense to wait for ten years in order to buy your dream car. You may be dead by then or unable to get in and out of it.
I agree - do what makes responsible sense. I can afford to pay cash and do at times. I paid cash this year for our new 2015 RR Sport & MB S550. However, I will probably finance about half of the cost of my Cali T because I can get sub 1% money. However the key is I don't NEED to finance it and will not be in a bind if things go south. At the end of the day we each have to make our own choices and live with the consequences.
I make $30,000 as an "account executive". I have $15,000 in credit card bills, I save no money, Every friday I go out in my designer Jeans and Ed Hardy T-shirt and act like I'm a multimillionaire.. you know to pic up the hotties in Louboutins (who also don't have a nickel) I make payments on a C-class or 3-series Bimmer I finance EVERYTHING!
