Have you tried Capital one for financing? they offer very good rates and financing up to 6 years which would bring your payment down considerably. $950 is much too much to spend on a car payment at $60K per year in my opinion...

 

Sorry man, I'd hate to be in your shoes.... I didn't buy my first P-car until I could pay it off cash.... I can't stand payments, they suck. I think I only financed two vehicles in my life. One took me one year to pay off (Honda Civic) and the other took eight months (BMW 3 Series).

I would tell you to drive something that won't put the farm in jepardy..... If you have to wait a couple of years then do that, there are a few SC P-cars out there going for 10K or so.....

Just my .02

-Eli

 

As an interesting side note

What do most people do as far as financing their cars
pay cash, take out a loan or lease their car?
just curious
jeff

 

Paid cash.

The more expensive the car, the bigger the depreciation hit. Borrowing money on a depreciating asset should be avoided IMHO.

I had a rude awakening in the mid-80's when there was a correction in the semiconductor industry. I was in my 20's, had two cars with payments and a $60,000 condo with a $1300 payment (interest rates were astronomical in the early-mid 80's). Got laid off. Needless to say, I learned my lesson and have been much more circumspect about borrowing money ever since.

 

Sold the Jaguar, one of the BMWs and my blown RX7 Turbo to get most of the cash.... The rest I had saved.... I had 4 cars and one bike at the time, so it was time to down-size and up-grade.....

-Eli

 

Depends on the rates you can get. If I can get sub 4% financing then I'll finance everytime as I assume that I can do better, even if only marginally, with the money in the market. Otherwise, I'd consider paying cash.

As to the original poster - I suspect that you are not married yet and are fairly young and I'd submit that you are probably at a point in your life where things might change very quickly. You might get married, have children, etc. Having a big car payment may not be the smartest move right now. From the time I was out of college at 22 till the time I was 28 I got married, had a child, bought a house. A huge payment would have been a pain in the *** at that point in time.

 

As to the side note about financing cars, I have a rule. Never buy on loan what you can not buy outright. There are exceptions to my rule of course, such as a house or absolute neccesities. Once the item passes the first rule, then it's about getting the best deal. Cheaper to buy it cash, unless you can find a way to make the payments or interest tax deductible while you put the rest of the capital towards an investment. I had the company lease my C4S, then bought it outright when the lease expired. Between leasing and loan, I was able to get a better deal on loans with the intent to keep the car, so the company is buying the Boxster with a bank loan.

Interesting problem with the first poster. As a young man with no children (I assume), why not put all your money towards a luxury dream now while you can, before other priorities say you can't? Or, should you be sensible now and invest in a house and stocks, and delay the gratification for later? I'd say be sensible now, and you'll be better able to handle the other priorities when they come and still be able to afford the luxury dreams albeit at a later time. That kinda leaves your Dad holding the bag, i.e. the car. Tell ytour Dad he needs a Porsche, and you can borrow it occasionally .

 

My advise is tell your Dad you can't afford it and you made a mistake. Put it up for sale and enjoy it for a couple months while you milk the sale process. Sell it private party. Take your medicine and buy a condo. It's kinda lame actually to be living with your parent's driving a Porsche IMHO. Enjoy it while you can though. In a year or two your condo will appreciate enough to put 25k down and have a small affordable payment.

 

How close are you to your father????

 

Agreed with pretty much all the comments above. Honestly, if it is that much of a struggle, put it up for sale. It's not worth the pain and suffering (eg eating ramen everyday)! It's just a car in the end and can be attainable in the future, just be patient.

 

well rick,
i would keep the car and buy my xenons after i redo my front end =D

 

Holy crap! No one's mentioned that insurance cost? $3300 a year? Where do you live, and is that the only car you're insuring?

I mean, I have 2 Porsches and 2 BMW's, and my insurance is less than $3300 a year, with 2 drivers, in So Cal!

As far as the car goes, $950 a month on a $60K salary is NOT what I'd be signing up for. I think back when I was making $60K a year, the biggest car payment I had was around $250/mo. And it wasn't a Porsche.

 

MY RESPONSE:

First, I am 27, single, live in an apartment ($600/mo with a friend), have no kids that I know of, and I am an attorney (criminal defense). My raise is a $625/mo "car allowance", plus I get commission on cases I bring in (not factored into my salary as they are "random"). My father is dating a VP of Bank of America, she told me a 72mo loan is no problem at 6.4%, before I bought the car. Now the term is 42 mo's, same rate. My credit is not so good (ie 600) because I have a lot of late payments on a credit card from when I was broke in law school. Of course the B of A VP is not too apologetic, she says "you should not have bought such an expensive car". I wanted to say I only bought it because you said the financing was in place......

I feel that it is foolish to pay cash for any depreciating item, like a car. I figure that I may as well make payment that will hopefully match the depreciation, that way I can drive the car as long as I want (2ish yrs) then sell it for what I owe (I already did the math).

The warranty ends in November of 2006, it';s aftermarket. Finally, I have to make the decision as to whether I should accept the "ridiculous" payment term, or sell the car (ie-stick my father with it). Does that help??????

RVP

PS- I agree, have fun know, be responsible later (if I have to)

 

Tim: For the long term I agree with your observation. In the short term however, 1-3 years, you never know what the market will bring. Suppose you took a loan in 2000 for $80K to purchase a 996 and took your cash and invested it into almost any mutual fund. Depending upon the fund you could still be hurting five years later. On the other hand if the time frame were 1996 to 2000, you would have made out like a bandit.

 

To my mind, if you are an attorney then do you expect your income to increase substantially
in the next couple years?
If so it may be reasonable to take the loan and when your income increase to pay off the loan early.
On the other hand, I'm an eye surgeon and didnt start makling money till after alot of schooling
I waited until i had the cash in hand before i started with the toys