Financing a 2+2 - how aggressive a loan is too much? | FerrariChat

Financing a 2+2 - how aggressive a loan is too much?

Discussion in 'FF/Lusso' started by ntmatter, Oct 16, 2019.

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  1. ntmatter

    ntmatter Rookie

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    #1 ntmatter, Oct 16, 2019
    I had been looking at 612's, but then had seen a mention of some very aggressive loans that would put something like an FF into my budget. But, are these a good idea? I've seen both a "balloon loan" option as well as "RV-style very long term loan" that would work for my budget ($30K-$40K down and $1200-ish per month).

    Curious to see if anyone has had experience with these kinds of products, for a car they'd keep 2-3 years. Would expect that for an earlier (2013-2014) FF that there's some depreciation to ring out but not a ridiculous amount; probably the same $10K-ish per year depreciation as in my current M5. Also, want to keep budget aside for proper maintenance, etc instead of maxing out.

    Being more of a Porsche guy, I've never really looked at stretching a loan for a car like this - would prefer to keep other assets invested rather than selling and taking the tax hit. The payment at these levels is comfortable, but am I being irrational in taking out this kind of a loan for this kind of a car? Perspective from those who have been there and done that is appreciated.
     
  2. ntmatter

    ntmatter Rookie

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    #2 ntmatter, Oct 16, 2019
    (And for clarity, I get that a person's tolerance for debt and financial position is individual. The question here is more like, "regardless of ability to pay, are these loans just stupid?!?")
     
  3. ttforcefed

    ttforcefed F1 World Champ
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    #3 ttforcefed, Oct 16, 2019
    there is no right answer - how aggressive the loan is depends on how much you make - i cld see financing the entire car as why pay cash for something that has no chance of increasing in value. i pay cash for all my cars (unless ferrari asks me to finance) as i dont like debt on toys
     
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  4. Philipnz

    Philipnz Karting

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    #4 Philipnz, Oct 16, 2019
    "Can I afford to fix it if something goes wrong" is just as important as "can I afford the repayments"

    But if your income is secure, interest rates are low, you could be dead tomorrow and never having owned a Ferrari. That would be sad (other than being dead of course)
     
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  5. Gullwing

    Gullwing Karting

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    #5 Gullwing, Oct 17, 2019
    As long as you’d be ok with a $20,000 repair bill on the FF. Things go wrong and they are not cheap when they do
     
  6. gilly6993

    gilly6993 Formula 3

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    #6 gilly6993, Oct 17, 2019
    Only you can answer that question....My guess is if you have the car a couple of years the down payment is gone....hopefully you'll be able to sell it for what's left on the loan and not write another check....and hope there are no repairs....these 4 seat V12's are plummeting....look at the price of '17 Lusso's....I have a warranty until March 2021 on my '17 and then it's likely on to the next toy....
     
  7. ttforcefed

    ttforcefed F1 World Champ
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    #7 ttforcefed, Oct 17, 2019
    yeh depends what your goal is and what the opportunity cost is....
    assume you find a car for 140k and you can borrow at 3% for 5 yrs - that comes out to a $2,516 monthly payment. put zero down and after 36 months you will have paid about $90k towards the loan, so about $50k outstanding. Sell the car for $120k - pay the loan off and you are left with $70k.
     
  8. gilly6993

    gilly6993 Formula 3

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    #8 gilly6993, Oct 17, 2019
    My bet is that car will be under $100K after 3 years.....
     
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  9. ttforcefed

    ttforcefed F1 World Champ
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    #9 ttforcefed, Oct 17, 2019
    certainly possible...$140k 458 wont be under 100k. a 140K FF cld be close
     
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  10. ntmatter

    ntmatter Rookie

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    #10 ntmatter, Oct 17, 2019
    Thanks everyone for the advice. One of the nice things about air cooled Porsches is that depreciation hasn't really been a factor in recent years (the downside is that they just don't give you the fizz like an Italian). So I'm worrying about something new on what would be for me a 3 season car. TTForcefed makes a great point - might be better to amortize the down payment across a more standard loan and come out even in 2-3 years than put the money down upfront in exchange for lower monthly payments to get to the same point (with worse interest rate). ALSO a great point that I could get hit by a bus at some point and regret the things I didn't do when I had the opportunity!
     
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  11. Il Co-Pilota

    Il Co-Pilota F1 Veteran

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    #11 Il Co-Pilota, Oct 17, 2019
    What is your yearly reserve for unexpected expenses?
     
  12. IloveGT

    IloveGT Formula 3
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    #12 IloveGT, Oct 18, 2019
    I hope this is not other thread by poser or trolls My apologies to the op is if it is not. Just too many similar threads recently about somewhat similar topics.

    To answer your questions, I felt that FF is a great Ferrari for a family of 4.

    How aggressive is your loan? $1200 a month is only relative to your total income and other loan payments, obligations, cash flow and reserve. What is your total loan to income ratio and what are the rest of loans for?

    I personally would not put down any money for a FF.
     
  13. ntmatter

    ntmatter Rookie

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    #13 ntmatter, Oct 18, 2019
    Not a troll - looked through several pages of threads on this forum and didn't see a "loan" topic, but I hadn't spent much time of fchat for a while. In terms of payment, $1200 is comfortable and $2500 is feasible, but I sort of get a bad taste in my mouth at the thought of that much monthly encumbrance for a car. I could pay for it outright, but prefer to leave the cash in investments because I think the return would be materially better (not to mention the tax hit).

    I think mainly what I was looking for was if anyone had experience on an RV or "Balloon" loan from Ferrari, in the sense that it allows much more car to come within your budget, however with much higher leverage. Both financially and "quality of experience" wise- is this wise?
     
  14. ScottS

    ScottS F1 Rookie
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    #14 ScottS, Oct 18, 2019
    Well there are several camps here with regard to loans.

    I’ll say if your goal is an FF and you have a reserve for maintenance etc buy from a Ferrari dealer. Get the warranty for most but not all items and use Ferrari financial. Probably 4.99 rate 5 years with no reporting to the credit bureaus. Include warranty in sale price as a point of negotiating and decrease your risk exposure.

    Your financial risk and other questions of depreciating assets etc are your business. I’ll assume you’re an adult making adult decisions.

    I have an FF that I’m selling thru my dealer- 25 K miles. Getting Lusso likely. Low price point. Close to a 612. If you’re interested pm me.

    ScottS
     
  15. amenasce

    amenasce Three Time F1 World Champ
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    #15 amenasce, Oct 19, 2019
    If you want to try Ferrari and face less depreciation, why not get a 458?
     
  16. ntmatter

    ntmatter Rookie

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    #16 ntmatter, Oct 19, 2019
    @amenasce, the answer to that would be, funnily enough, that I really like the look of a 2+2 Ferrari. I'm sure most here are familiar with the circus they get every time they pull out of the driveway (I've owned a Viper and an Esprit back in the day when those got a similar treatment) - I see the 2+2 cars as less "shouty" than the 2-seaters - more "gentlemanly" and under the radar in the styling.

    I know they'll never be a realistic investment (how long did it take the 456's to come out of the cellar?), BUT, for a car you'll drive they will also have shed much of the initial depreciation insanity so you can look at a net cost of ownership more in line with a new M5 or AMG. (Well, not an AMG, had one before and my motto on those is similar to English sports cars - "never again").

    @ScottS, will ping you today after College Game Day is over. Have to have priorities.

    Thanks everyone for this fantastic conversation, lots of great perspective on both cars and finance and I appreciate your help!
     
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  17. ttforcefed

    ttforcefed F1 World Champ
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    #17 ttforcefed, Oct 19, 2019
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  18. gilly6993

    gilly6993 Formula 3

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    #18 gilly6993, Oct 19, 2019
    Very true. My camp is if you have think twice about buying a car, ANY car, and have to at all think about what the car will be worth in a given time frame down the road then you should not buy the car....for me it’s that simple.....$10K, $20K, 30, 40, 50 etc a year depreciation. Shouldn’t matter....the experience should be priceless



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  19. Natkingcolebasket69

    Natkingcolebasket69 F1 World Champ

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    #19 Natkingcolebasket69, Oct 19, 2019
    I would recommend to get a warranty. The FF can be expensive, there is IMO nothing wrong with financing but take a warranty. It will help u enjoy the car.


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  20. vraa

    vraa F1 Rookie
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    #20 vraa, Oct 19, 2019
    Damn that 612 has a gorgeous interior!
     
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  21. ScottS

    ScottS F1 Rookie
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    #21 ScottS, Oct 19, 2019
    True. That’s why I said it and respect your view and generally agree.
    however some people smoke and I don’t agree with that either but acknowledge it’s their choice. We re mostly adults here. Some aspire and reach and some can just do. It’s a village.
     
  22. Natkingcolebasket69

    Natkingcolebasket69 F1 World Champ

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    #22 Natkingcolebasket69, Oct 19, 2019
    One can just lease: putnam and pfs will lease about anything for u


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