GT car price correction?
#46
Three Wheelin'
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Just thinking...If the recent market adjustment reduces your portfolio by $200K, you probably have a sizable portfolio which will likely go back up again over time. I have seen these fluctuations over the last twenty years and with a long enough horizon and a balanced portfolio a little leverage can work in your favor. Instead of pulling money out, borrow it at a low interest; a recovering portfolio will make up for the low cost of the loan. As another example, if I had $200K sitting around in cash ear marked in my portfolio for a car right now and I had the opportunity to buy that $200K car, I would not spend the cash, but rather borrow the money for the still very low interest rates (1.9% +/-). My $200K in cash would be ready to pick up a few undervalued shares in the near future in anticipation of recovery and likely make up more than the 1.9% it costs me. Or, if the feds raise interest, you can pick a nice AAA Muni bond at 3-4% tax free, covering the cost protecting the principal and even making you a little money...Is that a bad thought? I'm sure there are smarter, real and actual finance guys to chime in...
#47
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
I guess everyone has different priorities, but my GT3 cash is sitting in cash fund earning ~5%, no ways I would risk my car money in the markets, I have other money working away at that. And yes, the car will be a cash purchase, that’s the deal I made with myself a few years ago.
im the same as you. Wrote a check for the car. The peace of mind of no debt is worth far more than the potential return I could get by investing the cash. As you stated I’ve got other funds set aside that are earning interest for me.
#48
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
You guys are coming up with good points. I am sure there is a creative way to raise the $200K from my portfolio to purchase the car. I know my financial advisor did not want me to sell $200K in equities because of the capital gains, other reasons, and was looking at other options like being discussed here. Part of my original justification to my wife was the account was and is still up a lot so it was like free money. Also, the value of the car will not go down much in the near-term so I am trading one asset for another asset. If I am down over say $100K+ (even though I still have profit) it will be a more difficult sell to my wife and more difficult to for me to justify purchasing the car.
The following users liked this post:
wormman (01-29-2022)
#49
Rennlist Member
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Its funny, everyone is waiting for a tanked economy to buy cars when in reality the last thing " they " will be buying is cars.
If interest rates rose to 10% I'd have every penny I could scrounge up sitting in the bank and not buying a GT car ( or any car ) !
If interest rates rose to 10% I'd have every penny I could scrounge up sitting in the bank and not buying a GT car ( or any car ) !
The following 2 users liked this post by GT3 Mike:
shrimp money (01-28-2022),
WCGhost (01-29-2022)
#50
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
You guys are coming up with good points. I am sure there is a creative way to raise the $200K from my portfolio to purchase the car. I know my financial advisor did not want me to sell $200K in equities because of the capital gains, other reasons, and was looking at other options like being discussed here. Part of my original justification to my wife was the account was and is still up a lot so it was like free money. Also, the value of the car will not go down much in the near-term so I am trading one asset for another asset. If I am down over say $100K+ (even though I still have profit) it will be a more difficult sell to my wife and more difficult to for me to justify purchasing the car.
I get we all have different situations, but we're just trying to point out there are quite a few ways to get these numbers to work, even if the loans are very short term to bridge over some market fluctuations.
In this environment, I prefer a standard auto loan, but your financial advisor should also be able to help you evaluate a secure line of credit. There are a lot of ways to make this work, still get back to debt free as quickly as the markets allow, and keep a pretty tight lid on the total financing costs.
The following users liked this post:
rodneyr (01-28-2022)
#51
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
As I previously stated, we all have different priorities…
#52
Rennlist Member
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Not suggesting investing such funds in the GT3 is the better approach, but there is a reason in inflationary times certain 'real' assets (precious metals, TIP ETFs, etc.) get bid up. Wealth preservation / creation is all about having good asset diversification and staying the course with your defined risk tolerance / appetite 'NorthStar' (and pre-set time horizon). Cash, stock investments, bonds, real estate, 'collectibles' / art for that matter, can all have their share in a well balanced personal portfolio mix.
The following users liked this post:
WCGhost (01-29-2022)
#53
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
I hope no one’s taking personal finance advice from a car forum.
#54
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Odd comment for this subforum, lots of financial professionals and smart money guys in here. Also a safe assumption that majority of those shopping for $200k+ cars are at minimum financially savvy enough to understand the different avenues to purchase and opportunity costs associated with each. I'm not saying I'd personally be searching for information/wisdom here to make my decision, but this is certainly not a bad place to discuss these things amongst other people going through the same decision process
Last edited by PTS; 01-28-2022 at 06:22 PM.
The following 8 users liked this post by PTS:
AlexCeres (01-28-2022),
Eric5280 (01-29-2022),
GT3_Driver (01-30-2022),
JAMilford (01-30-2022),
jimjoe997 (01-30-2022),
and 3 others liked this post.
#55
Race Car
#56
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Odd comment for this subforum, lots of financial professionals and smart money guys in here. Also a safe assumption that majority of those shopping for $200k+ cars are at minimum financially savvy enough to understand the different avenues to purchase and opportunity costs associated with each. I'm not saying I'd personally be searching for information/wisdom here to make my decision, but this is certainly not a bad place to discuss these things amongst other people going through the same decision process
#58
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
it’s fun to discuss, sure. But everyone has a unique personal finance situation, so what works for one may not work for others, that’s all I was saying. Taking out a massive loan at age 60 vs 35 has different implications just like someone who is a HENRY vs Net Worth of $20m, etc. Sorry to disrupt the party
at 3% interest, you could float the entire car for only 10% of msrp. If you can’t handle +/- 10%, then damn, son you’re run close to the wire. A HENRY who decides they can afford $220K instead of 200k is perfectly situated to use an auto loan to buy the car.
this is a car forum. We like to see people get in cars.
#59
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
that’s my point. Most of these people haven’t actually run the numbers and are stuck in the mindset of “all debt is bad, must avoid even if I pay an extra 35% in taxes”. Sorry, the cash only crowd needs way more perspective.
at 3% interest, you could float the entire car for only 10% of msrp. If you can’t handle +/- 10%, then damn, son you’re run close to the wire. A HENRY who decides they can afford $220K instead of 200k is perfectly situated to use an auto loan to buy the car.
this is a car forum. We like to see people get in cars.
at 3% interest, you could float the entire car for only 10% of msrp. If you can’t handle +/- 10%, then damn, son you’re run close to the wire. A HENRY who decides they can afford $220K instead of 200k is perfectly situated to use an auto loan to buy the car.
this is a car forum. We like to see people get in cars.
The following users liked this post:
Yippiekiaye (01-29-2022)
#60
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
nothing wrong with a loan. Nothing wrong with cash. Just be mindful of your own limits.