GTorTT

In my book cash always better IF you have it.

By paying cash I don't feel bad if it sits in the garage over the winter or if it is raining and I can't drive it. Its a sunk cost and the car is mine.. If I were to finance, I would likely be bummed that I'm still making payments on something I can't drive. Anyone who is worried about depreciation should not buy or lease a new car. Get a pre-owned and minimize the upfront depreciation hit.

konaforever

Those are all personal reasons why you prefer to pay cash. Which is fine, but doesn't address financial reasons why it is better to always pay cash.

WenigerAberBeser

My Credit Union (Northrop Grumman) seems to have good rates - 1.74% for 3 years (new or used). Anyone can join if you donate $25 to one of their orgs.

People love to give financial advice on Rennlist. I'm sure there is a wide spectrum of incomes and net worths here, and they've all been able to 'afford' Porsches. However, most millionaires don't take out car loans or Fleases. You're essentially leveraging yourself to pay for a depreciating asset. Even if you DO have the cash to pay in full and you think you will invest it at a higher return, you are essentially increasing risk of said investment by leveraging the money. Wealthy people get wealthy by not taking out loans to pay for depreciating assets... they buy cars that are a small % of their net worth in cash.

GTorTT

Well, that is a true statement. They are personal reasons, but still likely relevant to many.

josephvman

If you're making 180 payments on anything you can't live in, you're f---ing crazy!

parkerfe

I agree one can make more with investments than the current low interest rates.
However, I have plenty of money in the market and just feel better with no house or car payments.

bulldog_YYC

Its interesting the number of biases that have been surfaced in this thread alone, cash vs. financing! There is no right answer, such as "always cash" or "always finance"; really depends on the individual. People seem to prefer cash due to risk aversion and always describing downside scenarios. I read that as folks that don't have much cushion (or gut) to absorb shocks in personal finance or markets. I dont agree with the statement that wealthy people always use cash to buy things and that is the reason for their wealth (which is probably from inheritance or legacy assets in a family and maybe these days, trading crypto or whatever people are hyping up in the market today). I also dont agree with the statement that financing everything to the hilt is the best route.

Finally, not all cars depreciate the same way; depreciate a chevy over 5 years vs a GT car. Look at the price trends over the last few generations of GT cars, they dont depreciate the same and have very good residual/tail value. As a guy that looks at financing all kinds of different assets with different values, I like the fact that there is good ability to leverage these cars as medium term (e.g. over the life of a 5 year loan for example), there is good evidence of value retention. The argument that they depreciate like any other car doesnt apply here. Therefore, there is actually some amount of debt that can continue to support the asset (e.g. 1/3 of its value) for the long term, and if you can lock that in with a low fixed rate, you can always arb the difference in cost of capital and put your money to work somewhere else and probably make money above and beyond the interest cost. Depreciation is a non cash expense until you sell!

So yes, I have FOMO that I paid cash for my RS. I would have rather financed or better yet leased, and plowed the delta in cash flows into the market to drive excess return and pay off the principal of the loan at some point where you cross a reasonable return threshold. People do this with houses all the time and those are just as susceptible to changes in value due to economic, market or other "events" just as cars are.

bulldog_YYC

Perhaps we can do this for the upcoming 992 vintage - happy to run the book

Former Vanguard Canada CEO launches service for Canadian retail investors to buy fine wines

After a two-year hiatus from Bay Street, former Vanguard Canada chief executive Atul Tiwari is raising a glass to a new joint venture with British-based Cult Wine Ltd. that will allow retail investors to access fine-wine investing.

Mr. Tiwari, along with former Vanguard executive Carrie Tuck, will announce on Tuesday the launch of Cult Wines Canada, a joint venture that will offer retail investors direct access to an alternative investment class that has typically catered to high-net-worth investors.

“A lot has changed over the past two years in the markets,” said Mr. Tiwari, chief executive officer of Cult Wines Canada. “It has not been a broad market rally and we are concerned about the concentration seen in a few stocks. We believe it is the right time for investors, active and passive, to diversify out of broad indexes that are not providing sector diversification.”

Mr. Tiwari believes that diversification can be found in bottles of wine.

“Fine wine has historically had low correlations to equities and therefore provides diversification within traditional portfolios,” said Mr. Tiwari, who has been a collector of fine wine for over 20 years.

Fine-wine investing is often referred to as real assets or “passion assets,” bucketed in with vintage-car enthusiasts and art collectors. For many, it consists of purchasing cases of wine to store in personal cellars, or consume with family and friends. For those who look to resell their collection, access to private auction houses can come with hefty fees – sometimes as much as 40 per cent of the sale.

Cult Wines is breaking down that barrier.

“We want to make investing in fine wine as easy as drinking it,” said Ms. Tuck, chief marketing officer of Cult Wines Canada. “We’ve been trying to find an alternative asset class to provide all the benefits of alternatives to more people.”

Cult Wines’s launch into the Canadian market this month coincides with the Bordeaux 2020 En Primeur – an exclusive event that allows investors access to purchase new vintages before they are bottled.

With more than $270-million in assets, Cult Wines already operates in London, Hong Kong, Singapore and Shanghai in addition to its North American debut last year in New York.

“We believe there is a huge appetite for fine wine investment in Canada,” Tom Gearing, CEO and co-founder of Cult Wines, said in a statement. “The Bordeaux 2020 En Primeur has traditionally been more of a focus for European investors, but as we establish our Canadian presence, we expect to gain new investors and provide them with this unique opportunity to enter the fine wine investment market.”

Canadians with as little as $15,000 will be able to invest in a global portfolio of fine wines from regions that typically include Bordeaux, Burgundy, Rhone and Champagne in France; Tuscany and Piedmont in Italy and the New World such as Napa Valley in the United States. The company will first introduce a portfolio for investors with $45,000 this month, and open the $15,000 portfolios in early July. Each portfolio includes a variety of cases from different regions to diversify the risk.

Since 2009, the company has seen average annualized returns of 12 per cent, compared with the TSX Composite’s return of 5.32 per cent.

For a management fee of 2 per cent, investors are provided a dedicated portfolio manager who – similar to investing in equities – will assess a client’s investment objectives, time horizon and risk level before customizing a wine portfolio. Clients purchase physical cases of wine, which are stored in a secure warehouse in Wiltshire, Britain. Their accounts are actively managed and clients can see daily price updates and portfolio valuations online.

There are no trading fees but investors do need to pay a one-time operations fee between 2.5 and 5 per cent that covers shipping, insurance, purchasing the wine and administration costs. (For accounts over $1.5-million, the fees drop to zero.)

Mr. Tiwari says the fundamentals of fine-wine investing come down to two factors: supply and demand.

As wine matures and improves over time, so does its value. The top wine producers produce a finite quantity in each vintage and increasing consumption, especially from countries like China, creates long-term growth in value, he adds.

Portfolio managers are able to select each investment of the portfolio from wines already pre-selected from a global investment committee, which Mr. Tiwari has joined.

The committee rates wines on specific characteristics – similar to the way managers rate equities, Mr. Tiwari says. The committee looks at factors such as brand, producer history, vintage quality and production, supply and historical price performance.

Building a Canadian subsidiary from the ground up is a challenge Mr. Tiwari knows well.

In 2011, he was a one-man band launching the Canadian division of U.S. investment giant Vanguard Group. Mr. Tiwari quickly built the asset manager into Canada’s third-largest exchange-traded funds provider with more than $30-billion in assets under management by the time of his departure in 2018.

“After Vanguard, I was really interested in where ETFs were going to go and I have always been interested in providing investors access to different asset classes that they can’t typically get on their own,” he said.

“I wanted my next move to involve something I thoroughly enjoyed and was passionate about. And for me, that was marrying my passion for wine and my passion for investing and building businesses together.”

jayspillz

Cash?

achenator

I thought someone was crazy when they used Woodside to buy a Carrera GT in like 2013. I think that worked out for them.

josephvman

In 2013 those cars were $600k, give or take. Total of payments on a 15 year loan at 6% is just under $1m. The upside is, your buddy only has 84 more payments and that baby is all his!

Deven

'No one' really keeps those loans. I used Woodside last year because my bank (Bank of America) refuses to give loans to independent dealers, and many Credit Unions don't like to give loans outside of your state, or limit the loan amount to $100K. Thus, people use Woodside (who happens to be one of the major financers at Barrett Jackson) because they know how to appraise high end cars (boats planes), make sure the title is clean, and do all the paperwork (registration etc). Woodside sells the loan to other banks (my note was 'sold' to Pacific Mercantile Bank within 10 days of loan being finalized) who end up managing the loan, but Woodside does all the paperwork (title, tags, registration etc).

Bank of America was more than happy to re-finance the loan once the title was transferred to me (I just waited to have all my tags/plate/taxes etc done, thus less than 2 months). The selling dealer said that is what 'most' clients do. Woodside also knows that this is what most people do and hence sell the loan quickly.

As a side note, BoA is extremely competitive and if you are a platinum plus client you get an added 0.5% discount. Thier rates will probably will beat most Credit Unions.

achenator

Wrong. They were in the 3's. The big run up came in 14. i know of a local car that was sold a couple years before in the 2's

https://flatsixes.com/cars/porsche-c...era-gt-market/

AlexCeres

there are some great things you can do with a secured line of credit, but it has a few problems for both home and auto loans
(1) credit unions and preferred BoA loans will offer better interest rates
(2) financing like this is often about improving and managing cash flow. A temporary shock to the market, like last year, could end up with a margin call or raising your reserve at the worst possible time. This is kind of the opposite of improving your control over cash flow.
(3) now you’ve pledged 2 assets for the same loan, which really isn’t worth it given (1). In the worst case, you give the bank the car keys and walk away. With a secured line of credit they ALSO get a bite at your other assets, probably during market lows at a fire sale.

You might use it partially to bring the auto loan for a particularly expensive car like a gt2rs into the range a credit union will cover, or some other cash flow management. But it’s tough to recommend instead of a more tradition auto loan given the competing financing possibilities at these market interest rates

AlexCeres

The cash only crowd seems to largely ignore taxes. Realizing a capital gain can be hugely expensive compared to a 1.99% loan. Say hypothetically you want to finance a new TTS at $200K. At 1.99% with a modest down payment you can dial your monthly payments to choose between $10K and $20K in interest. Selling $200k of assets and getting taxed at 23.8% is over $47K plus whatever you owe the state. In CA that’s another 13.3%.

Over $74K for the privilege of paying cash. so, yeah, I’m taking the ****ing loan

Everybody’s circumstance is different. Cash is great. But it’s absolutely not always better.