Crazy Canuck

I have $20,000 owing on my GT3. Some would say that is nuts. It could very well be argued that it is a mortgage payment each month. So be it. It will be paid off by the end of the year and is only at 3.5%.

But ... I have no other personal debt. My house? Not the biggest around but it is fully paid for. As are my other cars. I have retirement savings and general savings in excess of the balance owing along with interest in a couple of companies worth a few $$$. There is a mortgage on the company owned real estate but that interest is fully deductible, did not suffer a drop in value like the US, and is at less than 30% of the value. I'm pretty conservative in my mind.

To me, the key thing to understand is that there is no one calculation to consider. Many things should be considered when buying a luxury item whose purchase makes no logical sense.
Wealth
Cashflow
Income
Age
Health
Expenses both present and future
Family situation
Financial Reserves
etc.
etc.
etc.

There is no right answer.

Although they are a ridiculous 'waste' of money they also represent the best things I've ever bought. They give me pleasure and have opened up a world where I've met a hell of a lot of great people.

Serge944

I can relate to this.

Even going to a nightclub with a ridiculous cover charge - in general, you will be surrounded by more interesting people than say, a $10 all you can drink night.

85Gold

Did the math on my ex 05 6GT3 Purchase new for $101,000 traded 48 months later for $50,000 conservative valuation to 930man. $1,062.50 per month but 25,000 miles of fun Don't feel bad but doubt I would ever buy new again. Let somebody else take the 1st big hit.

Peter

Fritz Flynn

I agree, life is short so enjoy the finer things while you are able to

I would also consider you a responsible/conservative person financially.

5% of net worth is not even close to the norm or a reasonable goal even on a Porsche forum and if it was very few new cars would be sold.

Carrera GT

The 2% and 5% numbers were meant to pertain to the rest of the post, lenders and lease companies letting buyers borrow far beyond reasonable limits -- and to highlight the excessive debt levels that American society considers "normal" ... come out of school with excessive debt, just to pay over-priced schools, buy a house with excessive debt to pay over-priced property markets ... it's a debt-based lifestyle in a debt-based economy driven into the ground by a debt-fixated government. As they say, "end the Fed" and the root cause is extinguished.

As for Porsche drivers paying too much, if an individual wants to allocate a high percentage of their net worth to a depreciating asset like a car, it's their prerogative, but if they borrow to dig the hole, that's just a disaster waiting to happen.

mr_fizz

Present value of future cash flow. Some people will make conservative assumptions about future income and expenses, and some will make aggressive assumptions. The natuer of those assumptions are probably more important than creating a "net worth" rule of thumb when thinking about large outlays of cash (either investment or expense or assumption of debt).

Ritesh

+1. The reason we are on this site is b/c we love cars and specially Porsche. That is all we have in common. We are of different ages, social(careers/wife/kids/house/zip code) and financial backgrounds. Some of us are nearing retirement, some are just starting to get their professional carrers started. No one rule of % is going to apply to others. Besides How can you can't put a price on the fun you had or the relationships you build?

I work hard, save plenty, and take care of my family. What I do with any left over income is discretionary and entirely up to well MY WIFE and then me. It is just my approach to life. It might not work for you but it works for me.

ron_dargenio

I wish you would stop using pictures of my house.

Fritz Flynn

No doubt over spending equals over pricing but it also equals over earning etc....etc... So for those on the right side of the equation it's been a very VERY good thing.

I completely agree that barrowing money to buy a 150k sports car is in most cases not a good decision. If you don't have a 150k, one years salary, kids education account, 401k, decent equity in your home/properties etc... then buying a sports car likely isn't a wise financial move. However I don't think you need to be or should be a millionaire to enjoy a nice sports car and all the trimmings like track time, car clubs etc... that go along with it.

Tacet-Conundrum

Crap man, I've seen ten year loans for super cars in dupont registry. And that's been in the past couple of years.

s4awd

Agreed. Complete waste of money as with all my other toys. Though I love my cars, I always have to either invest or do something to justify my actions when buying just so I don't feel too bad. Eg. for my recent RS, I refinanced at a lower rate to offset future depreciation of the car. Too bad my house isn't worth nearly what I paid for it, but it's something. I only buy cash for my toy cars as well. If I don't have the cash I just wait.

Yoops Racing

3 types of buyers here...
and in this Economy and this current Hi end car mkt, this clearly negatively impacts our cars value over time...and in very short time

1 - Buyer that has enough net worth to not care a less about depreciation...they flip the cars for brand new every year(or add to their collection) and suffer no pain what so ever

and

2 - buyers that want the cars but are unwilling to take the hit on 1st-3rd yr depreciation

or

3- buyers that buy new get pissed when they see the numbers after 6mos or more and sell the cars to reduce the loss/pain

I happen to be a #2 and wished i would have waited another 6 -8 more months after buying my 08...could have saved another 12-20k...

I see no reason for me to ever take the first hit loss. I can use that money and a Pcar with <5k miles is like brand new to me

cay187

+1 on END THE FED. it looks like the fed will end itself pretty soon.

amaist

Are we discussing buying of Porsches and sound financial decisions in the same thread?

WTF is going on?!

A GTx Porsche is just one notch down in frivolousness from a Lambo. Yeah, maybe buying a new Ferrari can end up coming out close to even at the end but that is only if you can get one at list and the market doesn't tank. I wouldn't know as I am not fancy enough to buy one at list.

Whatever makes you feel happy and does not put undue stress on your finances seems reasonable to me.

Out of all the silly things we can pay for getting a Porsche sounds pretty reasonable to me. New or used it doesn't matter. I try to recruit some local guys with BMWs (mostly 3-series) to go to some DE events. They complain about the cost but then go to a club and blow 150 bucks on a stupid bottle. 2-3 bottles covers your DE and you will not catch an STD or get stabbed for accidentally stepping on some idiot's Puma shoe.

What's next? Discussion of how expensive it is to operate a 3,000 lbs 400 hp car at a race track? Want to spend less? Slow down!

This is a very expensive hobby. If you can afford it then good for you. You are very lucky in addition to probably being very good at whatever it is you do. Lots of people are very good at what they do but not everyone gets to play with the toys we have.

Carrera GT

Ask three accountants to pencil some npv calculations and you'll get three answers and not by a small margin. Most households with a Porsche in the garage still use little more "kitchen table accounting" or the luxury car market would be a very different place. As with the original post, buyers would simply never buy new cars and would be looking at the secondary market -- and the presence of sharp financial minds in the secondary market would cause it to be much more efficient -- these extremely over-priced (unscrupulous secondary market dealers) and under-priced ("get me out" private sellers) would be driven towards fair market prices. I don't think I'm alone in thinking the car industry would cease to exist if car buyers made informed, rational decisions.