99_Carrera

Hey guys! Been a while, but I'm looking to get back into a P-car again, and have a question on what I will be up against in financing one...

Here's a little background: Six years ago when I was 27, I went in to get financing for my '99 996 and the banker laughed and told my dad that if he put my name on the loan that they'd refuse to finance the car. So, we financed it under his name and I made payments, then sold it three years later to get married.

Since then, I've paid off a 180k house, had around 100k run through our credit cards, I am absolutely debt free except for one cbr600rr sportbike financed through Honda, and I plan on having that paid off within 8 months.

My credit score is 870, earning per year is $65k a year and even though the wife is divorcing me, I still have kept the house and equity with no debt owed to her. (Really civil, nice divorce...)

I would LIKE to get a 991 S and order it with some custom options, but what would I likely need to save as a down payment? What should I expect?

bbbradley

No mention of when you plan to buy, but IMO $65k/year and a ~$80k+ car seems like a bad combination unless you have a significant pool of liquid assets to use as a down payment. And by significant I mean several hundred $k and the line of sight to replenish what you pull out for the down payment.

I might be more fiscally conservative but that salary and that car price does not seem like a wise choice at all...

Remember, just because the bank will finance the purchase doesn't make it a good idea! Porsche is not going away anytime soon, patience grasshopper.

JMO...

boolala

As a rule of thumb you can "afford" a car worth about 3 month's salary. Not every year mind you. That's the total cost of the car. In your case that would be about 16K. A 991 is going to cost about 100 K. Now if you are young, have a windfall of some sort you can certainly do it by putting a large down payment but otherwise it's a pipe dream at that income level. Nobody will lend you the money (without a cosign) with something much less than an 80 K down payment.

Also I would double check your credit score. Don't see how it could be 870 when the range is 300 - 850.

Good luck.

bbbradley

Perhaps to you and I, but not to:


His credit score is simply "yes."

Quadcammer

lol, um, no on the first point.

agreed on the second

kosmo

Even if your FICO score is 770, most lending institutions wont lend w/ just 20% down because of your income. You may have to put down ~40%.

mousecrab

Well I do know a few people who makes less than $65k/year yet buy or considering buying cars that are well into $100K. One of them think it is ok to get a used Lambo with that kind of salary...
Not a wise thing to do.

Marine Blue

I think what it really comes down to is your debt to income ratio. If you don't have any debt and this will be your only monthly payment then you can figure that a bank would lend maybe up to 30% of your montly income. Assume that your down payment will be the difference.

Having said that I'm not sure it makes financial sense to do this but in the end that decision should be yours. Why not pick up a really nice Gen 2 997?

DLennox

Actually, FICO ranges from 253-893. These are strange numbers, I don't know who came up with them, but that is the range.

To the OP, your question is not one for this forum, it is one for your bank. Everyone here has a different opinion on matters like this. I feel that if you cannot put at least 50% down on car like this you shouldn't get one until you can, but that is just my opinion...

bbbradley

http://www.fico.com/en/Company/News/Pages/07-13-10.aspx
You may want to let FICO know they are wrong.

DLennox

There are 3 credit reporting agencies and each has different scoring systems. TransUnion ranges from 253-893. Technically we all have 6 or more credit scores depending on which we look at and who you are borrowing money from. An Auto enhanced score is different from a mortgage score etc.....

Tcc1999

I'm not trying to be sarcastic but do people pull these numbers out of the air or are they based on a reality found on planet earth? Personally, we finance as much as possible b/c no one has ever explained to me the benefit of using current expensive dollars (and losing the potential gain on such money invested) rather than future cheaper dollars (with a percentage hedge e.g. TIPS, depending on risk tolerance). Of course you're gambling the Market doesn't go south but, then again, you're also gambling your job won't go POOF either (or some other unforeseen expense will come along).

OP, it's your money and your life, do what you want - or what your bank will let you do

boolala

I think that it's precisely this type of reasoning that has sunk the housing market.

So I guess banks are stupid and cannot possibly make money by getting paid back in inflated dollars. That's the real problem all along - lending is a losing proposition in theory. Contrary to what we have been told it's not that people have been defaulting on loans they had no chance to pay back (like the OP).

Thanks for this new spin on the banking crises.

99_Carrera

Hey, I much appreciate your responses guys.

I hate it when people typo critical info and here in haste I managed to do it myself! 780 would be my credit rating, so many apologies there.

Anyway, I know that this isn't a financing forum... but it does concern what I want to finance. And since many of these members did just that, I figured I'd get some good advice... which it looks like I have.

I was considering putting down 30k before I wrote this topic. Now I am considering slightly more.

While I wouldn't mind getting a gen 2 997 where the depreciation had already hit, I really only want to so this once, say every 20 years, and get the newest and special order a few personal preferences that I can be proud of for that length of time. Yeah, I really should consider the tradeoff, I know... I could save half of my money and get a lightly used 3 year old car instead....

Really really good points, fellas.

aaks38

I am on an engineers salary but like others have stated had a low income to debt ratio and bought a used 997.1 for about half of what it would have been new. I had a used vette that i sold to give me a good down payment so that is key. 30-40k down will mean youll have to finance 70k which is well over 1400 a month. Thats going to be like a paycheck on your salary..

As to interest rates, i just refinanced with penfed for 2.49% used car. It peanuts..

Reality is I doubt the 991 is that much of an upgrade to warrant 50k+ over a used 997, i think the sensible choice so you dont put yourself in a financial bind and constant stress about trying to maintain a new porsche is to just buy a used one. There are those out here that trade in every few years as they have the finances to do so, but there are a few of us whom dont mind owning something used. We end up saving tons on depreciation with a subtle loss in performance due to not having the latest technology.