APEX GT3

Looking for help in deciding on paying for the car in full or financing (60k at 48mos) 4.24% (local credit union).

This weighs heavily on upgrading my current insurance which does not protect me against a total loss, I'd get killed on the insurance settlement payout value of the 992. I've always taken the risk, but Luck favors the prepared.
This being my most expensive vehicle purpose, I am looking to protect myself.

Any feedback for Porsche owners regarding adding Gap Insurance for the loan, financing a portion, say 60K out of a 160k car VS paying for the car in full, no loan, and going with Hagerty or Premium insurance and adding an "agreed car value" plan?

Thank you.

audi4t

Usually your CU is more than willing to provide gap insurance - ask how much they will charge.

I would finance as much as possible - CD rates can be found right now over 4.24%

22992

I skipped gap and paid 60% of the out the door cost at delivery. If you put a significant portion down, no need for gap. I have agreed value coverage through Cincinnati, which was way cheaper than Hagerty. My agreed value is for replacement cost+sales tax and is very inexpensive. Interest rates were very low when I bought. The choice of to put that much down backfired, as my "dry powder" is collecting a higher interest rate than my pcar loan rate. I wish I put less down, but at the time the money I had in cash/money markets was making nothing, so that's what I went with.

Shogunade

No use in thinking about it. Clearly you made the right call at the time. Is Cincinnati a nationwide co?

22992

I believe they are, may want to double check on their site: https://www.cinfin.com/find-agency

DodoBrd

If you are putting more than 30-40% down, why would you need GAP insurance? GAP exists to 'protect' you if you owe more on the car than your insurance company is going to pay out in the case of a total loss. So, if you bought a $150k 992 and put $50k down (33%), then totaled it, there's no way the insurance company is going to write you a check for <$100k. The only time it might make sense in this example is if you take a very long term loan (5-8 years) and perhaps the value drops significantly for some reason.

By the way, look to see if Porsche Insurance is offered in your state. I have it and it is agreed value, uses Porsche OEM parts, and is a premium + pay-per-mile type of setup. In general, I think it is cheaper as long as you drive less than 7k or 8k miles per year.

APEX GT3

Thanks guys. I’ll check with Cincinnati. Porsche insurance not available in Connecticut.

AlterZgo

I get gap insurance only if I'm leasing a car b/c I usually put zero dollars down on a lease and gap insurance has always been included anyway as part of the lease payment.

For car purchases, I just get insurance from a reputable insurance company and rely on my state's insurance department regulations. I know in California, insurers are required to pay you the market value of your car if your car is totaled. So, if my 992 S is selling for 10% above MSRP in the used car market (similar mileage and options), the California Dept of Insurance requires the insurance company to pay you that market value less your deductible. They cannot arbitrarily depreciate your car from MSRP simply because it's X yrs old and has X miles. They have to do research and find actual comparable cars for sale with similar mileage and options and use those as comparable vehicles to establishe how much they can pay you. If you can't agree on a value, you can force the insurance company to literally find a very close comparable vehicle and buy it for you. They also have to include sales tax and registration as part of the total loss settlement. So you don't have to really worry about "protecting your investment" with any additional or esoteric coverage or some stated value policy b/c the insurance requirements of the state already does that for you with a regular auto policy.

Other states may not have as stringent requirements as California so YMMV.

malba2366

GAP insurance will only cover the difference between what the car is worth and the outstanding loan amount, so if you make a large down payment GAP will be a waste of money. Depending on if you paid a large ADM and if your car is highly optioned or PTS/exclusive, it may make sense to have an agreed value plan, as traditional car insurance will only pay out the book value of a car and not necessarily account for ADM or all the options on the car.

Scott P

Thanks for the tip, I looked, unavailable in NY, "Porsche Auto Insurance is currently available in Arizona, California, Florida, Georgia, Illinois, Ohio, Oregon, Pennsylvania, Tennessee, Texas, and Wisconsin."

Adendum: my understanding is Adirondack Insurance will cover track days ONCE-after that you're on your own for damages caused on a track day.

shrimp money

There are money market funds (not FDIC) paying 4.27%. Look up ticker SWVXX.

Alternatively, Huntington Bank is offering 3.6% money market (FDIC) for 12 months guaranteed.

I got my loan through my credit Union back in early May, and they’ve been paying me more than what my loan costs for a few months now.

rokkerkory

On a 150k, how much would u guys out down? Being that u could pay for all of it in cash?

shrimp money

You put down what makes your bank happy.

detansinn

If you can get the loan amount to under $100k, there will be a lot more favorable lending options. There’s some indication that the $100k threshold is no longer that stark line that it used to be, but you still can get better deals if you shoot for a loan amount under $100k. As others have noted, you won’t have to worry about gap insurance with that kind of downpayment.

If you’re sitting on the cash (ie. not pulling it from investments) and you’ve got substantial reserves, I would simply pay cash or at least, put down as much down as you can afford. In an inflationary environment, your cash is just losing value sitting in an account. When there was “free” money with interest rates below 3%, I was one of the people taking the free money. The combination of higher interest rates and our inflationary environment, I am back to paying “cash”.

Going into a recessionary environment, if you’re a W2 type, it’s nice not to have to worry about a big car payment if your employment situation changes.

As with all of this, your mileage may vary and everyone’s circumstances are different.

DodoBrd

I’d preface this with ‘everyone’s situation is different’ but here what I did.

my out the door cost was $215k. I had about $150k in cash not using, so I financed the rest with the shortest term / best rate (2 years @ 1.99%)… lucky to find this rate in Q4 2022. My intention/goal is to pay off the $70k after 6 months… my personal finance philosophy is debt is generally not good for me (I understand many other philosophies exists so no need to argue math with me)