You guys are paying cash for Corvettes
10-20-2016, 12:33 AM
#62
Team Owner
10-20-2016, 12:39 AM
#63
Racer
In situations where one is basically securing an auto loan with a deed of trust. If ones financial situation is secure, which probably applies to most here (typical vette owner demo) then not an issue. (Must have been thinking of my personal sitch years ago, which um, er,well doesn't apply to everyone)
10-20-2016, 12:39 AM
#64
It makes no sense at all.
..
10-20-2016, 12:53 AM
#65
Instructor
This just personal opinion. I spent the last 10 years in debt growing my photography business as well as purchasing several rental houses while the housing market was in the toilet. I became officially debt free January 2015 and for me there is no better feeling than owing money to no one. So, for me paying cash for my car(s) is a sign of success. That being said, I invest a significant amount of my yearly income. So I can see both sides of this. If you can purchase a car in the sub 2% interest rate, it's not a bad investment. Especially on a depreciating asset. On the flip side, you need to be smart enough to invest your money or have someone to invest for you in an area that will earn you double what you are paying in interest on your note at a minimum. Again, this just how I personally look at it with my own money. Although, typically I just pay cash so I don't have to deal with the banks. Whether I decide to pay cash for something or get a loan from a bank, my theory is, if I can't afford to pay cash for it, then I can't afford it. Simple as that.
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10-20-2016, 07:03 AM
#66
Safety Car
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Unmodified C8 of the Year 2021 Finalist
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For me it looks like a chicken or egg thing. Both my wife and I pay cash for every car we buy, usually every 3-4 years (C6/C7 much longer) for the last 36 years. After each purchase we immediately start saving/investing for the next car(s) religiously. I'd rather pay myself than the banks. We both just had to drive old DDs way back when until we got the cycle going.
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10-20-2016, 08:57 AM
#67
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So many of these post talk about hating to make car payments. Are you people still living in the 50's? Have you heard about a great new invention called the computer and the internet and "automatic" loan payments that require no thought or effort? I also have the money to pay cash but I've financed the entire cost of the car because I'd rather have the money "available" than tied up in car. And that's how I've bought my last three cars with interest ranging from 0.9% and 1.49% That's called "free" money.
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RoadVettes (10-23-2016)
10-20-2016, 09:05 AM
#68
There is one other thing about paying in cash nobody has talked about yet: insurance.
In Oregon, Full Coverage isn't required if the car is owned outright...only Liability (we're talking hundreds of $$$ per month difference).
In Oregon, Full Coverage isn't required if the car is owned outright...only Liability (we're talking hundreds of $$$ per month difference).
10-20-2016, 09:39 AM
#69
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Wow, now there's another "bright" financial decision. Okay folks now drop your collision coverage.
Last edited by Walt White Coupe; 10-20-2016 at 09:39 AM.
10-20-2016, 09:43 AM
#70
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I paid cash. I find it hilarious that people buy a horrible "investment" in a Corvette and then fret at the margins about tax considerations, free money, savings vs. expense spreads etc. What about the $10,000 you lost the moment you drove it off the lot and the $4,500 in sales tax (State of Connecticut) you paid? Where's the ROI in that consideration? To each their own, but most of us (I think) invested and worked hard, had our own life experiences and made a decision accordingly. I didn't need a spreadsheet for this decision. Making a small spread on a car loan is the least of my worries, plus more cash out the door for an interest payment on a toy is just good money after bad. Plus, what if that great alternative investment goes down 5-20%, now you are out on both sides of the deal. Some investments let you eat (earn money) some let you sleep (don't have to worry about it). For a Corvette (with potential repair bills) I will take the "let me sleep" option.
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John Ulrich (10-21-2016)
10-20-2016, 09:44 AM
#71
Pro
10-20-2016, 09:59 AM
#72
As a matter of fact, it is.
NOT sure exactly what you mean by "collision" coverage, the coverage I have is only to cover any damage I might do if I run into someone, which is something I have never done in 45 years of driving.
If the fault lies with the other guy, they pay.
Any repairs to my car would be paid by me (something I can easily afford).
Okay folks now drop your collision coverage.
If the fault lies with the other guy, they pay.
Any repairs to my car would be paid by me (something I can easily afford).
10-20-2016, 10:07 AM
#73
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NOT sure exactly what you mean by "collision" coverage...
????????????????
Let me add another WOW.
????????????????
Let me add another WOW.
Last edited by Walt White Coupe; 10-20-2016 at 10:09 AM.
10-20-2016, 10:48 AM
#74
10-20-2016, 11:02 AM
#75
Drifting
Thread Starter
This is sure to be as divided as chrome vs black wheels.
First look at the article. The Corvette is the most expensive car of the seven. And the majority who buys them? Old guys! So it is absolutely expected that more people will pay cash for Vettes compared to Mustangs, Camaros and Challengers. Duh?!?
But it is interesting that everyone immediately went to the debate of whether it is better to pay cash or finance. In a low rate environment (loans of 1-2%), it is almost always better to put your money to work elsewhere. Although there are no current guaranteed returns in the 4%+ area, it would be hard to earn less than 1-2% over any given 5 year period.
Of course this assumes that one would take that money and fully invest it and not increase spending, etc.
For most (including me), the sweet spot is somewhere in the middle. The last 4 cars we have purchased were financed between 0.5% and 2%. We put half down on the 2% (Vette, highest financed amount) and the rest we financed 100%. Simply because we would rather take the chance that we could earn more money on a 60/40 stock/bond investment than we were paying as interest on these loans.
The other thing is that we keep our cars 10 years on average. We write off the value on day one. Assume it will be worth nothing when you part ways.
But we do pay off some debt early. Our last 30 yr mortgage was paid off in 10 years and this 15 yr mortgage is targeted 10 years although it is a very low 3%.
You need money to make money. The more invested the better. But the other side of the coin is that there is comfort in being debt free and working toward it faster than your neighbor. Again, the sweet spot is probably somewhere in the middle.
Thank god we are all fortunate enough to be having this debate.
First look at the article. The Corvette is the most expensive car of the seven. And the majority who buys them? Old guys! So it is absolutely expected that more people will pay cash for Vettes compared to Mustangs, Camaros and Challengers. Duh?!?
But it is interesting that everyone immediately went to the debate of whether it is better to pay cash or finance. In a low rate environment (loans of 1-2%), it is almost always better to put your money to work elsewhere. Although there are no current guaranteed returns in the 4%+ area, it would be hard to earn less than 1-2% over any given 5 year period.
Of course this assumes that one would take that money and fully invest it and not increase spending, etc.
For most (including me), the sweet spot is somewhere in the middle. The last 4 cars we have purchased were financed between 0.5% and 2%. We put half down on the 2% (Vette, highest financed amount) and the rest we financed 100%. Simply because we would rather take the chance that we could earn more money on a 60/40 stock/bond investment than we were paying as interest on these loans.
The other thing is that we keep our cars 10 years on average. We write off the value on day one. Assume it will be worth nothing when you part ways.
But we do pay off some debt early. Our last 30 yr mortgage was paid off in 10 years and this 15 yr mortgage is targeted 10 years although it is a very low 3%.
You need money to make money. The more invested the better. But the other side of the coin is that there is comfort in being debt free and working toward it faster than your neighbor. Again, the sweet spot is probably somewhere in the middle.
Thank god we are all fortunate enough to be having this debate.
10-20-2016, 11:03 AM
#76
Drifting
Thread Starter
I just hate having a lean on the car.
and would never have a 100% of my cash invested.
I persoanally think there is risk and hassle with all investments. Don't like dealing with the bank either. Also there are a lot of people driving cars they can't afford. Its nice to be able to say its paid off.
and would never have a 100% of my cash invested.
I persoanally think there is risk and hassle with all investments. Don't like dealing with the bank either. Also there are a lot of people driving cars they can't afford. Its nice to be able to say its paid off.
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pdiddy972 (10-24-2016)
10-20-2016, 11:08 AM
#77
Drifting
Thread Starter
That greatly complicates the math. I can get a new car loan for .9 percent today, but home equity loans are more on the order of 4.5%. The interest is deductible, but now you have to figure out your marginal tax rate to figure out which is smarter. Even at that, you're only deducting about 28 cents on the dollar in interest paid. I doubt the home equity loan is cheaper than using a new vehicle loan.
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chas70 (10-21-2016)
10-20-2016, 11:10 AM
#78
Drifting
Thread Starter
In situations where one is basically securing an auto loan with a deed of trust. If ones financial situation is secure, which probably applies to most here (typical vette owner demo) then not an issue. (Must have been thinking of my personal sitch years ago, which um, er,well doesn't apply to everyone)
10-20-2016, 11:19 AM
#80
That greatly complicates the math. I can get a new car loan for .9 percent today, but home equity loans are more on the order of 4.5%. The interest is deductible, but now you have to figure out your marginal tax rate to figure out which is smarter. Even at that, you're only deducting about 28 cents on the dollar in interest paid. I doubt the home equity loan is cheaper than using a new vehicle loan.
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