Financing

+2

 

+3

 

Accidentally left off the other portion of the comment.

 

If you can't pay cash, you can't afford it.

 

That is far too simple

But you are not going to bash all those, who earn their money by suggesting to people not having the neccessary cash, that borrowing money is the solution to wealth? .

 

I think it's all about personal risk tolerance. It's hard to say if there is a 'right' or 'wrong', everybody has their own view on what level of liability one is comfortable in taking.

The most conservative view being of course to have zero debt. Nothing wrong with this viewpoint in my opinion.

I have 2 cars loans at 1.74% - I have enough savings to pay off the car loans anytime....I just rather put those funds in higher yielding investments (i.e. dividen stocks) One loan ends next year, the other in 2017. That to me is not high risk, but that's just me.

From what I gather from the OPs post, was either they were just curious (no other reason) or from what I've seen historically from the OPs post; an effort to see if Ferrari owners are in general too 'leveraged' (The OP has taken a stance that a huge bubble exists in the Ferrari market)

I of course would have loved to not speculate the OPs intentions and have a civil dialogue about the reasoning of the original question, but I respect the OPs desire to keep their motivations on asking the question private.

 

Well after a moderator asked me to chill, yup

 

financing can be beneficial

although the rate of financing can be higher than that available rate for savings, it is possible for the purchaser to net more income by keeping funds in savings and paying the higher rate to borrow... the principle of savings grows during the time, while the loan principle decreases, making the total interest paid less than received on the savings

financing can be a structured way to save if one is not disciplined to save... it keeps savings intact, which otherwise may not be replaced in a structured manor and provides a cash hoard in times of great need

if things go wrong, financing can be leverage against one's financial position, loss of job, loss of health, loss of assets, payments must be made, all of which can cause assets or car to be liquidated at inopportune time...

peace of mind without any overhanging obligations for personal "toys" most likely keeps many from seeking to finance and feel more secure

 

well said

 

+2

Good to see you Ricky...

Cheers

 

thanks man

 

For whatever its worth, I'm glad Paul asked his questions.

My issues with Super_Dave's posts (here and elsewhere) are 2:

1- It doesn't help your credibility when you say you own things but don't. I agree you don't have to own any of these cars to want to discuss them. We come here to discuss and learn about the cars we love. No one ever said you had to own them to enjoy them.

2- It could be just an inherent limitatoin of text-based communication, but some of Super_Dave's posts strike me as too judgmental (at least for me- everyone I guess has a different tolerance) . Typically against people who aren't financially conservative or those who don't use their cars in the way he would.

Put them together and its hard not to snicker. Anyway that's how I see it.

To the actual question I think financing is a tool and like all tools it can be used wisely or abused. I think Cheesy lays out my opinion very well. But everyone's situation is different and those situations also change over time. So at one moment in your life you may think like Sherpa about wanting no debt and then you might say something more along the lines of Cheesy. Rather than hard and fast rules, I find life is best when I maintain a degree of flexibility.

PS- Welcome back ttforcefed!