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Cash vs Finance - Who does what?

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Old 03-10-2018, 08:40 PM
  #31  
Nashvegas
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Rich guy thread lol
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Old 03-10-2018, 11:05 PM
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I finance now
im over 65 and if I drop dead they can have it back
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Old 03-10-2018, 11:29 PM
  #33  
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Originally Posted by Nashvegas View Post
Rich guy thread lol
Rich guy forum....with a few insane people...actually.
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Old 03-13-2018, 12:48 AM
  #34  
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Originally Posted by EMT1 View Post
I finance now
im over 65 and if I drop dead they can have it back
👍🏻
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Old 03-13-2018, 02:13 PM
  #35  
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Most people have to have a car. Like a Nissan Versa at 15K. Finance or lease it if you have to. Any Porsche is a toy. Pay cash for any kind of toy. Rich guy or not.
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Old 03-15-2018, 09:22 AM
  #36  
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Originally Posted by HardHitter View Post
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.
Does buying a 150,000+ car make any sense in the first place? Of course it doesn't, it's just an expensive big-boy toy. Their value drops like a freight elevator, so why muddle your mind over a percent here or there, except of course when your buying it, and then it's just fun.
Personally I find cash to be less taxing on my limited brain power.
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Old 03-15-2018, 11:30 AM
  #37  
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Originally Posted by TheRealBob View Post
Does buying a 150,000+ car make any sense in the first place? Of course it doesn't, it's just an expensive big-boy toy. Their value drops like a freight elevator, so why muddle your mind over a percent here or there, except of course when your buying it, and then it's just fun.
Personally I find cash to be less taxing on my limited brain power.
well said
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Old 03-15-2018, 08:55 PM
  #38  
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I did a mix of both but bought my 991.1 TTS 1) used/CPO and 2) a few months after the 991.2 started showing up on dealer floors, so I keep telling myself I benefitted from two separate depreciation hits thus making it a sound financial decision.
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Old 04-23-2018, 05:26 PM
  #39  
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Cash is nice and simple, but think about the opportunity cost. Someone mentioned loans are at 3%. Think about taking that $150k and investing wisely.

I'll turn this around on the cash guys and say "if you can't afford the payment, you can't afford the car"
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Old 04-23-2018, 05:34 PM
  #40  
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Originally Posted by bommerts View Post
Cash is nice and simple, but think about the opportunity cost. Someone mentioned loans are at 3%. Think about taking that $150k and investing wisely.

I'll turn this around on the cash guys and say "if you can't afford the payment, you can't afford the car"
I agree, regardless of method of payment, the question is, in the end how much cash are you left with?

I bought mine with cash, however I am well aware it's probably not the smartest way, especially if I get a little fender bender that shows up on my carfax, which would be a very costly hit. As apposed to leasing, where the leasing company would take the hit. I could also certainly benefit from a lease tax deduction.
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Old 04-23-2018, 06:05 PM
  #41  
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I have 17 cars total at the moment. My AIG private collector policy values them at around $1M. I have one (1) car loan with a balance of 28K on it. That is the way I like to run my stuff.

**BUT** ....keep this in mind. I am looking at some other cars that are in the 280-300K range. I am NOT paying cash for them, even though I can. I will put a good amount of money down and get a cheap loan.

The whole "if you can't pay cash you can't afford it" bit is somewhat true, but if you have more than one car you need to look at it from a portfolio standpoint. Are you upside down on your car collection? Or is there a reasonable amount of debt with a huge amount of equity?

So for me I buy 100K an under cars cash but when we are talking a 300K car I am not parting with that much cash up front.
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Old 04-23-2018, 07:34 PM
  #42  
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Originally Posted by bommerts View Post
Cash is nice and simple, but think about the opportunity cost. Someone mentioned loans are at 3%. Think about taking that $150k and investing wisely.

I'll turn this around on the cash guys and say "if you can't afford the payment, you can't afford the car"
It's a commonly mentioned argument, but it does not really work that way. Why - because taking a loan to invest more money is essentially leverage, and that multiplies both your risk and your return proportionally. Seems fair, but 1) you have to ask yourself if you can really take more risk (most people can't or otherwise they would have done it already); 2) if the answer is yes, actually the best way to handle it would be to make your investments riskier in the first place rather than do this. Why? Because 1) in investments you most likely get disproportionally more returns for higher risk, while leverage does not give you that benefit; 2) what you are paying for loan is after tax money and what you are getting from investments is pre-tax, so need 4-5% yield to cover 3% loan cost. If you up the risk purely in the investment side not mixing cars into this, you can get this tax-matched if you decide to do leverage, so only 3% of yield will go to covering 3% cost of capital.

Of course, this assumes that you have access to wide variety of financial instruments and are in a higher tax bracket, but most people here fit that profile.
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Old 04-24-2018, 12:27 PM
  #43  
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Originally Posted by MaxLTV View Post
It's a commonly mentioned argument, but it does not really work that way. Why - because taking a loan to invest more money is essentially leverage, and that multiplies both your risk and your return proportionally. Seems fair, but 1) you have to ask yourself if you can really take more risk (most people can't or otherwise they would have done it already); 2) if the answer is yes, actually the best way to handle it would be to make your investments riskier in the first place rather than do this. Why? Because 1) in investments you most likely get disproportionally more returns for higher risk, while leverage does not give you that benefit; 2) what you are paying for loan is after tax money and what you are getting from investments is pre-tax, so need 4-5% yield to cover 3% loan cost. If you up the risk purely in the investment side not mixing cars into this, you can get this tax-matched if you decide to do leverage, so only 3% of yield will go to covering 3% cost of capital.

Of course, this assumes that you have access to wide variety of financial instruments and are in a higher tax bracket, but most people here fit that profile.
Very thoughtful and great point.

Question though.....how does the risk of buying a new $200K quickly-depreciating sports car factor in? Add in accident risk, market fluctuation, etc.

Best move would be to maximize the upside and minimize the downside. Not sure how you do that on something like a Porsche.
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Old 04-24-2018, 12:29 PM
  #44  
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Originally Posted by Catorce View Post
I have 17 cars total at the moment.
OK you're garage/barn must be sight to see. Pics!
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Old 04-24-2018, 12:43 PM
  #45  
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Originally Posted by bommerts View Post
OK you're garage/barn must be sight to see. Pics!
I wish it was one contiguous space. It's two leased warehouses, one house garage and one big driveway. However, we're drawing up plans to build one big garage on the new house we bought to house them all plus some......
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