Porsche ownership, Cash or Finance?
11-18-2016, 01:42 AM
#46
Rennlist Member
We financed our vehicles 100%. My credit union gave us 1.7% for a five year loan. At that rate I'd pay off the mortgage before the cars. We have a low net worth and a good income / healthy cash flow with high stability. That all biases towards financing.
For those that finance, it's a very sensible risk reduction measure to put down enough cash to always maintain a net equity position. That's not what we did this time around.
I think the answer to this question would at least consider personal psychology, occupational compensation model and stability, career stage, net worth / cash flow / other personal finance metrics, and to a lesser degree perhaps generational differences.
Since it's the least obvious what I mean, I'll explain that last one. Speaking very broadly and in relative terms, boomer and earlier generations faced with extra income are more likely to save it to create a bigger safety net, and millennials are more likely to spend part and save part to maximize lifestyle over the long run. Both decisions are reasonable ways to look at life. We typically pick the latter.
For those that finance, it's a very sensible risk reduction measure to put down enough cash to always maintain a net equity position. That's not what we did this time around.
I think the answer to this question would at least consider personal psychology, occupational compensation model and stability, career stage, net worth / cash flow / other personal finance metrics, and to a lesser degree perhaps generational differences.
Since it's the least obvious what I mean, I'll explain that last one. Speaking very broadly and in relative terms, boomer and earlier generations faced with extra income are more likely to save it to create a bigger safety net, and millennials are more likely to spend part and save part to maximize lifestyle over the long run. Both decisions are reasonable ways to look at life. We typically pick the latter.
11-18-2016, 02:45 AM
#47
I had the US POSTAL service pay cash for my new 2016 C2S. I have, like many others here had the Porsche as a dream car for years and years. But being a military guy for almost 30 years the pay never made that possible. I had the misfortune or was fortunate to have been hit by a mail ( jeep ) truck while riding a big Suzuki scooter. The driver was in a hurry and ran a stop sign. Didnt see me and rammed me at my 5 olclock postion. Totalled the bike and did almost totalled me. Three weeks in the human hobby shop and almost a year to walk right again.
With much delay qnd negotiations the government settled after almost 3 years and my search began. Found a perfectly spec'd 911S except it had the PDK, learning to love it now. Got to write a check and it felt great. A real dream come true through a nightmare but I smile everytime I see a mail truck.
I have through the years bought 62 other brand new cars BUT
" There is no substitute".
With much delay qnd negotiations the government settled after almost 3 years and my search began. Found a perfectly spec'd 911S except it had the PDK, learning to love it now. Got to write a check and it felt great. A real dream come true through a nightmare but I smile everytime I see a mail truck.
I have through the years bought 62 other brand new cars BUT
" There is no substitute".
11-18-2016, 07:07 AM
#48
This is my line of thought as well. I pay cash.
Only you know your own sitution.
Not to open a can of worms, but you can lease if you and your accountant decide you have a tax advantage through a business. If not, lease rates can be expensive.
my father once tolds me if it floats, flies or does something else with an f youre supposed to rent it. Seems i violated all three of those already...
Only you know your own sitution.
Not to open a can of worms, but you can lease if you and your accountant decide you have a tax advantage through a business. If not, lease rates can be expensive.
my father once tolds me if it floats, flies or does something else with an f youre supposed to rent it. Seems i violated all three of those already...
11-18-2016, 01:26 PM
#49
11-18-2016, 01:56 PM
#50
Rennlist Member
If I don't have the cash on hand, the toys have to wait.
11-18-2016, 04:39 PM
#52
Rennlist Member
You're going to get a million different opinions on this. In the end it's what your comfortable with and what you can afford. One way to look at it is: pay off your necessities in life like your house, education and daily drivers. The Porsche is a depreciating none essential toy, so finance it unless you've got the cash to pay it off (after settling the rest of your life).
11-18-2016, 07:41 PM
#53
Point one: You don't get the best deals buying cash. The dealer makes money on the interest you pay when you finance, and a ton of money on a lease. He's looking, first, for customers who have a reliable income stream he can tap into. Cash customers looking for a deal are in second place.
If you're intent on making a dream come true, then order a new car to your specs.
If you're satisfied with achieving a quasi dream, then buy used car or a new car off the lot.
If saving money trumps the dream part, then you should chose the latter because a lot car is going to be cheaper than an ordered car.
In either case, you're likely to cut a better deal by financing your car. As I mentioned, a dealer is more willing to do 10% off on a financed car since he gets a cut of the interest you pay. If you can go either cash or finance, then finance, get the better discount, then pay off the loan after, say, 2 months.
Good luck with your dream.
PS: If you've got a trade, sell it yourself or forget about any meaningful discount.
If you're intent on making a dream come true, then order a new car to your specs.
If you're satisfied with achieving a quasi dream, then buy used car or a new car off the lot.
If saving money trumps the dream part, then you should chose the latter because a lot car is going to be cheaper than an ordered car.
In either case, you're likely to cut a better deal by financing your car. As I mentioned, a dealer is more willing to do 10% off on a financed car since he gets a cut of the interest you pay. If you can go either cash or finance, then finance, get the better discount, then pay off the loan after, say, 2 months.
Good luck with your dream.
PS: If you've got a trade, sell it yourself or forget about any meaningful discount.
11-18-2016, 08:06 PM
#55
Exactly. Ultimately you will pay more if you finance (although not much at current rates). As long as the rest of your finances and commitments are in order, do what you want. As many have said, it comes down to personal philosophy. It's your money.
11-18-2016, 11:08 PM
#57
Banned
Yo G. Go to the dealer wit green. Better if y'all bring c notes. Under the table yo. 20 g up front. IRS will never know. Finance is yo bitch. 7fity credit is king. Drive away wit it.
11-18-2016, 11:31 PM
#58
Pro
No Car is an investment. Even if I have a 918, Carrera GT or 911R - I will drive the hell out of them.
Finance or buy - is a complex question. If you trade the markets and can make 20%+ or beat the main indexes by a factor of 2 or 3 or higher - then Finance the car. Do not lock your assets in a car if you can invest in market or other ventures and generate return. Key to generate positive return in the end.
And you have to factor Finance interest paid vs with your investment gain and taxes. If you come out ahead in that equation then the answer is Finance.
If not buy it in cash, drive the heck out of the cars and enjoy life. No need for major complex headaches.
Now, if you are going to drive less than say 12K or 10K miles a year, just lease it
I can even sum it in this way (alternative to above) - Sleep Equation
Can you sleep comfortably at night if you buy the car in cash?
Or Can you sleep comfortably at night if you finance the car?
Don't do anything which ruins your sleep.
Finance or buy - is a complex question. If you trade the markets and can make 20%+ or beat the main indexes by a factor of 2 or 3 or higher - then Finance the car. Do not lock your assets in a car if you can invest in market or other ventures and generate return. Key to generate positive return in the end.
And you have to factor Finance interest paid vs with your investment gain and taxes. If you come out ahead in that equation then the answer is Finance.
If not buy it in cash, drive the heck out of the cars and enjoy life. No need for major complex headaches.
Now, if you are going to drive less than say 12K or 10K miles a year, just lease it
I can even sum it in this way (alternative to above) - Sleep Equation
Can you sleep comfortably at night if you buy the car in cash?
Or Can you sleep comfortably at night if you finance the car?
Don't do anything which ruins your sleep.
11-19-2016, 04:44 PM
#59
Rennlist Member
As for me...have used a combo of leases and purchases depending on the circumstances. Being an AD military guy also circumstances have not made paying off a mortgage easy or the better option (tried it twice and other than planning from the outset to be an absentee landlord; didn't get much out of buying a house to live in for only 2--4 yrs before the military moved me someplace else). So about 6 Porsche's later I currently financed my current 991 and lease any other 2nd car just in case I am deployed or moved overseas (SCCRA laws allow me to turn the lease end without penalty). Will plan on paying off a mortgage as others have said once I retire and can actually stay in the house. Meanwhile college is funded for the kids (GI-911 bill - thank you) and I've got six figures in my TSP plan and will get my retirement paid out at retirement in addition to that. Have five figures in the brokerage account and still another 10-20 years working once I retire at my choice (FT or PT or contract work) so yeah I am a strong believer that the lease, buy w/cash, and finance choice just depends on ones circumstance and stage in life as well as personality and plans.
But at least we call agree...they are great cars and well worth it!
