Cash vs Finance - Who does what?
02-22-2018, 04:42 PM
#16
I've owned 15-16 cars and always paid cash for them up front. I was taught that if you can't pay cash, you can't afford it. I'd be interested to hear how all of you bought your 991. Right now I have a 997.1TT, which again I paid cash, and deciding on getting into a 991. In this position, would you guys use all of the sale proceeds of the 997 as a down payment for the 991 and finance the rest or just spend the rest of the cash to buy it outright? What did you do for your cars.
02-22-2018, 08:29 PM
#18
Instructor
I'm in the exact situation . . . While I was waiting for the proceeds from my 997.2 sale (gap of one week), I "bought" my 991.1 with a third down and financed the rest . . . I can pay the balance at anytime, but with the proceeds hit . . . I just let it sit in my account, HaHa. Now, if I will really leave it there (@ 0.5% interest) maybe I just pay it off in a couple months. But throwing it at the market makes sense to me as well . . . I have owned every Porsche before this; as others have said, no right answer. Sorry not to be of more help, I'm trying to decide for myself as well, KH
02-22-2018, 08:49 PM
#19
Rennlist Member
These internet guys lease their cars usually - just so they can tell you they have the latest thing and tell you how great it is. If you haven't paid for it completely you just have a rent a car.
02-22-2018, 09:30 PM
#20
Instructor
KH
02-23-2018, 01:34 AM
#22
Rennlist Member
There's no right answer. I know guys who paid cash for their cars, but blew their life savings, and guys worth 9-figures who have notes on their pickups because they couldn't resist the "cheap money". It's up to the individual and nobody else's business what someone else does with their money/credit.
02-23-2018, 11:16 AM
#23
There is no right answer. You do what works for you. I bought all cash.
I have a good friend who paid all cash for his Aston Martin. Someone sideswiped him and the car had to be repaired and it showed up on his carfax. When he traded the car in, he was hit for 20k of depreciation. This makes the argument for leasing, especially if you're using your car as a DD where the odds of an incident are higher.
It's really a matter of personal preference. Just because you can afford all cash doesn't mean you have to pay all cash.
I have a good friend who paid all cash for his Aston Martin. Someone sideswiped him and the car had to be repaired and it showed up on his carfax. When he traded the car in, he was hit for 20k of depreciation. This makes the argument for leasing, especially if you're using your car as a DD where the odds of an incident are higher.
It's really a matter of personal preference. Just because you can afford all cash doesn't mean you have to pay all cash.
02-23-2018, 01:18 PM
#24
Three Wheelin'
IMO if you're in your prime earning years - finance at a low interest rate and invest the difference wisely in real estate, blue chip stocks, a new business start-up and etc. If you're older and approaching retirement pay cash. A car is a depreciating asset with a terrible return on investment. Use the money you invested wisely to finance your retirement. Let's face it Social Security and other retirement programs are collapsing and you will soon be on your own in retirement.
02-23-2018, 08:43 PM
#25
I agree with others, there is no right or wrong way. I do think however which ever way someone purchases any vehicle whether it be finance, lease, cash the purchase shouldn't handcuff you financially. If you're worried about your savings after paying cash or worried about paying other bills after financing/leasing then you probably should look at a lower cost vehicle.
02-24-2018, 07:27 PM
#26
Burning Brakes
Finance a DD, pay cash for a toy. DD gets exposed to all sorts of risks, so why not have finance company take some of the risk?
02-26-2018, 03:08 AM
#27
Always did cash up until my last new car purchase because the interest fell below the inflation rate. If the car company (BMW in this case) is going to give me effectively a negative interest loan, then I am going to take it.
02-27-2018, 10:11 AM
#29
Rennlist Member
Banks are still doing below 3% as of January, but Porsche Finance is often way higher. There is no right answer for all. Leasing is the most expensive option, but financing at cheap money can be lower cost than paying cash if your money is working for you somewhere else. I never want to owe more on a car than it's worth (in a worst case scenario where I needed to dump it) but I don't mind using cheap money when the math works out for me. Otherwise, you do you.
02-28-2018, 04:52 PM
#30
Rennlist Member
I financed 95% of the purchase price at just under 2%. I wouldn’t have been able to purchase this car for cash. If interest rates weren’t good (say >=4%) I would have bought something else now and made this purchase later. But at <2% the cost of interest wasn’t a factor in my decision.
I don’t think cash vs finance (or lease) much matters if the total financial impact and outlay is acceptable and the big risks are covered. It’s both a depreciating asset and an unnecessary luxury toy so there is wisdom to support each approach depending on the situation and financial strategy. To me the really important universal thing is risk control - I want to always be able to cleanly get rid of the car, clear any obligations, and recover all equity if something major and catastrophic happens in our family life. To many, paying cash guarantees that risk is well managed.
I don’t think cash vs finance (or lease) much matters if the total financial impact and outlay is acceptable and the big risks are covered. It’s both a depreciating asset and an unnecessary luxury toy so there is wisdom to support each approach depending on the situation and financial strategy. To me the really important universal thing is risk control - I want to always be able to cleanly get rid of the car, clear any obligations, and recover all equity if something major and catastrophic happens in our family life. To many, paying cash guarantees that risk is well managed.