My rule of thumb (stolen, of course, from those wiser than I) is that if you can't afford to pay for the car in three years, you can't afford the car. Be patient, don't overextend, and you will be much better off in a few years. I always paid cash for my cars. When I was making $60k a year, I drove a car that I bought with $4,000 cash. I still pay cash for my cars, only now it's a 996. Live within your means, and you will be able to live much better soon. Overextend yourself, and you will always be playing catchup.

As someone else suggested, you might consider an older 911. The 3.2 Carreras are great cars, and can be found in good condition for low to mid $20's. Insurance will be much cheaper, too.

 

Hey, I look at it this way. "Life is not a dress rehersal!" GO FOR IT! Keep your eye on the target and forge ahead one step at a time. Good Luck!

 

With the 997 S that is due in this month I'm getting about 50% of the purchase price from the sale of my 996 and the balance I'm financing with my home equity line of credit. Interest is 1/4% under prime and tax deductible. Although I don't have to pay any principal I try to pay off the loan over 36 mos.

 

Certainly home equity is the way to go if you can. I also agree that you never want to be 'extended' and personally have a rule that I will not finance more than 20k for a car, but I do always (unless the interest rates are a big difference) opt for 5 year loans, and pay them off in 3 years or less. This way if any catastrophic even occurs I am never under water in the car and also I can skip payments for a period of time. Thankfully nothing has ever caused me to do this, but it is like loan insurance.

Hope my little view on car purchasing helps (although a true financial guy would probably think I'm crazy).

 

what was the purchase price of the car? If it was a great deal, keep it. If not maybe still keep it if you will reasonably grow into the payments over the next few years. Maximize your pretax savings, and let time work for you on that side. A shorter loan term is less interest paid to the bank overtime. I think if you do not plan on keeping it long term, consider a cheaper scenario (ie lease) I financed a good chunk of my car, but plan on running it into the ground. I may not, but bought it with the intention of doing that. If i strike it rich, well then?

Jeff

 

Here is what I have decided, check out this craziness..... I am going to take the 42 mo loan @ 6.6% interest, financing $35,000 (the car was $32500, plus tax, tags & tires=$35000, give or take)(BTW: 1999 C2, 6-speed, all options except traction control, sunroof delete, immaculate car w/ 24k miles, extended warranty 'till Nov 2006, I think it is a good deal). The payment is $940/mo. Here is where it gets crazy.....I am putting $5,000 into an account, and depositing my $625/mo car allowance into the account. When the payment of 940 is taken each month, it will take 15 mos before the 5000 is exhausted, at which point I will owe 23000 on the car (the car will likely have about 45k miles on it then). At that point I hope to be in a much better financial situation and will sell the car for AT LEAST what I owe. In essence I am creating a balloon payment situation, with the intention of selling prior to the "kick in" of the high payments. I know people are thinking, why not just finance 30K, payment is still 850/mo, too high for me. This way my car payment is paid in full for the next 15 mo's..... Works in my head, that's all that matters. BTW, I did not want to stick my dad with the car...............

Thanks for everyone's input

Rick

 

You only live once...I pay $1000/month for mine used for 4 years financing, but it is a business thing. Thats 0 down full financed. Normal for $40K. Used loans never do more then 5 years usually. You could probably get a new one at a dealership financed for 6 years and pay the same as the used one...but like I said, you only live once.

 

Oooh, no traction control and sunroof delete, sounds like someones old track car!
As for price, thats pretty nice. 6.6% seems a little high, I PMed you with some other options.

 

Car was not a track car, was a garage queen, the car does look like showroom condition.... thanks.

 

Does track only car often looks the same as garage queen?

I mean if it had never eaten any severe highway dust, since it was only on track, then it will look like showroom one.

 

I have a client that specializes in Porsche leases, he may be able to structure something for you.
Email or PM me and I will give you the info.

 

get enough cash to buy car, but finance it and invest the money. almost in anything you invest now you should beat the interest rate.

i am sorry to tell you that vp of a large bank is no different than a teller. i work for a very large bank. EVERYONE in my office is a vp. LOL. my secretary is also a vp ;-) so is the security person on my floor!

and a rate >6% for a 42months loan is essentially highway robbery. try more lenders. 72 month with 6% is more acceptable.

 

You're right of course and this strategy worked against me a few years ago. But in my adult car buying life I've come out ahead. Not to mention that it just pains me to hand over so much money all in one fell swoop. Like you said, you never know what the future will hold and I might have need of the relative liquidity of an investment vs. owning a car outright. I guess it mostly boils down to I like to keep as much money under my control for as long as possible as opposed to giving it over. Keeps my options and opportunities open. Of course this only works as long as credit remains relatively cheap.

 

Probably does not sound like good advice now, but it will before you know it. Take the $950 plus the $600 you are paying in rent (plus what ever you are paying for insurance) and buy as much house/condo as you can possibly afford today. In two years, the price of that condo or house will be much higher than it is now, the interest rates could also be a lot higher. Since your mortgage payment will be tax deductible, you could go much higher than the $1,550 per month on the house payment.

Your income should increase at a decent rate and you will be able to more reasonably afford a similar car in a couple years. Might not be the case for a house if they are appreciating at a good rate. Also focus on keeping away from tickets and you should be able to reduce the insurance costs as well by then.

Lastly, max out your 401k contribution every year while you are young.

The other option would be to keep the car and live for today.

I have always wanted a Porsche and have now owned one for a little over a year. I waited until I was 39 and did not have to worry about financing. There were many times I came close to pulling the trigger. No regrets for waiting though.

Kris

 

I would never resort to 6 or 7 year financing just to get into a car I could otherwise not afford, esp for a car whose resale value almost everyone got wrong in calculating lease assumptions over the past 5-6 years. To be tied to a car longer than many marriages last is not the wisest of moves IMHO.