Looks like owning outright is in the lead. Question for the financial folks...... Wouldnt it make sense though (even if one had a large amount of disposable cash) to use someone elses money to make such a purchase? The car is still going to be a depreciating investment is it not? If one can borrow say $150,000 on a home equity line for 4%, then be able to deduct the interest further lowering the effective borrowing rate, wouldnt that make more sense than using ones own reserves? Even these days, your own $150,000 can be used to easily make more than 4% return.
Own mine outright. Either way, I wouldn't feel comfortable buying an F-car that is still depreciating any measurable amount. As an example, on the 308, 328, and 348 series, the depreciation cycle has leveled off. So...your only real expenses are maintenance costs(overblown), gas, and insurance. With any luck, you can sell the car later for about what you gave for it. Certainly an inexpensive hobby once the "big money" for the purchase has been spent. Not the same story on the 355's and newer. However, you would think that purchasers of those cars are fully aware of the depreciation hit lying ahead and probably don't care. Suits me, but I couldn't stomach it.
Lease versus buy has always been an interesting issue. I think the right answer depends on many factors. The only way to proceed is grab a spreadsheet and compute the total cost of ownership in both cases, while considering as many factor as you can including tax savings, investment opportunities, how long you think you'll keep the car and all the other small numbers that add up. One interesting point about leasing is that it is better to start by shopping for lease companies and then find a car. The dealer offer may not be the best one. I have always owned my cars but next time I may lease. Will see.... AW
I agree, especially for an older car that is holding it's value. Buy a 308 for say $28k (it's a nice one). Finance it with an equity loan so the interest is deductable. Sell it again in 5 years for say $25k. Not counting expenses, you've driven a Ferrari for 5 years for $3k. Now a $220k Ferrari is a different story; after 5 years you'll be out a ton of cash so if you couldn't afford to pay cash, you probably can't afford the depriciation either. Unless you're so rich you just don't care! LOL Ken
I own both my cars...I am rather averse to debt, especially for a "toy" as Frank Parker says. When I get the 355, it will be purchased outright as well.
I own my outright. It's a comforting feeling sliding your car side ways through a corner and know if you hit something and total the car you still are not paying on a car you can not drive.
I've always gone by the rule that if it depreciates then lease it but if it appreciates (or has the potential to do so during the time of ownership/use) then purchase.
Never tie up cash in a toy!!! INVEST your cash and earn a return, instead of letting it sit idle in a car. Ernesto
62 250 GTO, if u have ur car paid off you really cant get to that cash unless you sell it whereas if you finance it you still hold ur cash in your own account...did i miss understand you?
I own. Nothing like not having to continue to pay on something, especially if it depreciates. I save equity lines for things like realestate deals(appreciating assets)I can turn quickly, that is if I need to. Ideally I try to use my own $$$ for most everything.
