n8kruger

First, let me apologize for a somewhat off-topic thread. A fellow enthusiast wants to buy another Porsche from a private party and was interested in financing given the historically low interest rates for mortgages etc. That way, funds could stay in the market and reduce the opportunity cost. However, rates were quoted in the 6-8% APR range, which seems high.

Has anyone done this recently? Does anyone do this? Thanks in advance

An unrelated picture for your enjoyment from the Lane Motor museum in Nashville.

raspritz

Most people who can afford collector vehicles pay cash. The APR you mention is more than three times what I recently was quoted to purchase my TurboS cab; obviously, the lender was intending to be discouraging.

Mark Salvetti

I don't think it's crazy. I can see financing part of the purchase. Even though I got my SC for something like $12K in 1992, I was $4K short. I had just sold an RX-7 and was actually looking at long-hoods (Almost bought a 1970 911T, but the seller backed out.), and then the SC came along. We were between kids, and it felt like now or never. So I financed the remaining $4K.

I don't think it's a great idea to finance $20K or $30K, but it's not a bad way in if you are a little short and don't have other options.

Look at credit unions, they are often easier to work with for something like this.

Mark

parkerfe

Never finance a toy or lifestyle

Locker537

I subscribe to this rule, but find myself wondering about GT cars. Many of them seem to be appreciating or at least somewhat stable. Finance a GT3 RS and you may come out ahead?

Mark Salvetti

Well that's a different animal by at least an order of magnitude. What kind of monthly payment are you talking about? Something like $4K? That seems like a really bad idea. That kind of money should add up pretty quickly to being able to pay cash instead. And if not, then something else is going on.

Mark

JesusFast

My money is worth more to me in the market and I like to be able to pivot.
I've done very well with my last two "toy" cars I've financed. (made more in the market then the interest cost me.)

But everyone does things differently.

Don't let financing a wonderful 911 stop you from getting it, man!

Life is to ****ing short not to enjoy it!

oldskewel

I still remember the moment when I knew the world's financial system was about to implode. Probably around early 2007. House flipping craziness was well underway for many years, always searching for and finding a greater fool.

And then one day I saw a TV ad offering to finance up to $5k, with no credit requirements ... for a VACATION. Yes, that's right, financing a vacation, something that is guaranteed to be financially worthless as soon as you get home. The people on the beach in the commercials sure looked happy though. I'll guess it was a hot seller.

So you would not be the first, but I agree that it is maybe not a good financial move. And in regards to the OP's original question, it makes sense that prudent banks would charge higher interest since the value of the collateral is less predictable.

sithot

^^^

AG81

If I were to finance a Porsche I would borrow from a lender holding a liquid asset. Secure the note with that asset and hold the title. Pay on the note as I saw fit, taking as long as I wanted to repay the note. Since the note is 100% secure the interest would be very little. I've done this at half a percent interest.

n8kruger

Thank you all, this discussion has been very helpful. The situation is as a few have surmised, where the buyer has plenty of access to funds to buy the car, but wanted to finance anyway. Leveraged investing by proxy I guess. Not my personal cup of tea.

I agree that the banks either don't understand or don't think the 1960s Porsche is reliably valued and liquid enough to be a good risk. Securing the loan against something more compelling is a very interesting idea. Thanks again

Laszlo_Laz

Banks won’t loan at any going rate for a vehicle older than 12-years old.

Therefore, you’ll need to finance through a shadow source, there are three or four that finance classic cars.

That’s going rate even with 800+ credit score. That rate would be for 84-months.

Commercial banks have no interest in carrying classic cars on their books. They’re full of risks.

Hope that helps.

Auto_Werks 3.6

Lightstream and Penfed (Pentagon federal). If he can't get a decent rate there, he is unlikely to do much better.

Big eff you to the people that always have to chime in about how one shouldn't finance a Porsche. I don't owe any money one any of my Porsches, but I still hope you die of old age before you realize your own personal dreams.

raspritz

Wow. Reading the entire thread, I don't see that anybody said one shouldn't finance a Porsche. It's your life to manage. Just don't finance a lifestyle over your head and then declare bankruptcy, which negatively impacts the rest of us.

Auto_Werks 3.6

One of the first comments:
"Never finance a toy or lifestyle"