993s and Loans
07-13-2014, 02:58 PM
#16
Drifting
I'd borrow from 401k if rate is low enough, market is already bubbly so it's crap shoot what it does next and when.
I tried to get a loan when buy my 993 one year ago. Porsche offered 7%, and JPM offered 4% (48mo)...I said no thanks.
at %5.99 for 120 months you'd pay 21k in interest on 50k car (zero down)...that's an engine rebuild.
can try lending club...but rate will high since it's unsecured financing
I tried to get a loan when buy my 993 one year ago. Porsche offered 7%, and JPM offered 4% (48mo)...I said no thanks.
at %5.99 for 120 months you'd pay 21k in interest on 50k car (zero down)...that's an engine rebuild.
can try lending club...but rate will high since it's unsecured financing
07-13-2014, 03:03 PM
#17
Burning Brakes
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Using 401K $$ means you'll get hit approx 45% in taxes. What this means is (1) you give 45% of your 401K to Obongo for the pleasure of going into debt for something you apparently cannot afford, and (2) you'll need to add that 45% tax penalty to the price of the Pcar.
07-13-2014, 03:05 PM
#18
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Once you've lived a debt free lifestyle, you'd never borrow a cent again. And there's no reason to.
Last edited by LexVan; 07-13-2014 at 03:57 PM.
07-13-2014, 04:24 PM
#19
Drifting
Huh? It's a loan not a withdrawal.
07-13-2014, 04:38 PM
#21
Rennlist Member
C'mon Paul, please don't read exactly into a brief comment. ***** nilly lending, on just about anything, was a lot of our problems in 2007. 10 years on a used car?
How many people in the musical chairs game got caught with too many payments when the music stopped. Now that they've burned through their retirements, it'll be a whole new block of society on the dole in the future, that we will all be supporting. And we'll have to read the "heart wrenching" stories of all the 75 year olds who still have to work.
How many people in the musical chairs game got caught with too many payments when the music stopped. Now that they've burned through their retirements, it'll be a whole new block of society on the dole in the future, that we will all be supporting. And we'll have to read the "heart wrenching" stories of all the 75 year olds who still have to work.
This is a no brainer solution, with an interest rate less than a car loan, and could be tax deductiable if properly worded.
You would want to pay yourself back in a reasonable amount of time and not float a car for the term of your house note.
Ed, you dont really think it was car loans that pushed the US economy to disaster, do you?
You would want to pay yourself back in a reasonable amount of time and not float a car for the term of your house note.
Ed, you dont really think it was car loans that pushed the US economy to disaster, do you?
07-13-2014, 05:03 PM
#22
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One little gem a lot of people forget when taking a loan against their 401K is if they lose their job. Bam. Loan is due immediately. Be careful.
07-13-2014, 05:03 PM
#23
Burning Brakes
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Well, I guess one could read the comment both ways based upon what was originally posted.
I considered pulling some money out of my 401k, but the stock market is cooking right now.
I don't have the requisite $$$ sitting around, so I needed to get a loan.
I don't have the requisite $$$ sitting around, so I needed to get a loan.
07-13-2014, 06:00 PM
#24
Rennlist Member
I don't mean to sound like a dick, but if your taking money out of your 401k or financing for 120 months, you can't afford the car- these are toys plain and simple.
07-13-2014, 07:26 PM
#25
I went through Lightstream to keep my cash in the bank, it was a simple process and I could not have been more satisfied with the whole thing. Super low interest rates and you own your car outright. It's actually more of a loan with your other assets as collateral. They didn't care what age the car was.
07-13-2014, 07:43 PM
#26
Race Car
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This seems like a valid question that should be easy to answer. I'm no financial genius but if you have $45K cash and can invest it and make 5% on it for five years you will make $12,751.19. If you borrow $45K and pay 2.75% on it for five years it will cost you $3,216.09 in interest. Seems like a god idea to borrow the money if the planets align. There is no figure for inflation in my equation.
07-13-2014, 10:33 PM
#28
Rennlist Member
07-14-2014, 12:43 AM
#29
A 401K loan is almost always a bad idea unless you have dire financial issues (Read: your house is about to be foreclosed on)
07-14-2014, 11:54 AM
#30
Three Wheelin'
One of the fallacies of borrowing from your 401k is repaying the amount with post tax dollars which depending on your tax bracket instantly tacks on 25 to 37% to the borrowed amount. That is just one of many reasons, dipping into your future for a toy goes against all financial sense. Your money, your choice.
Like others who've replied, I have usually paid cash for my cars over the years. If the cash wasn't available, I would utilize my HELOC and pay it off within a year. For me, getting a conventional loan on a toy would not be an option.
Like others who've replied, I have usually paid cash for my cars over the years. If the cash wasn't available, I would utilize my HELOC and pay it off within a year. For me, getting a conventional loan on a toy would not be an option.