Z06 monthly payment?
01-13-2015, 09:45 AM
#41
What would we ever do without them! Like some others, my opinion on the subject has changed. Until rates move upward, I personally believe that financing is the better choice...at least for me. As long as financing isn't used as a way to buy something that one can not afford, today's rates are really a great deal.
01-13-2015, 09:50 AM
#42
Burning Brakes
Member Since: Dec 2009
Location: Tysons Corner, VA
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What would we ever do without them! Like some others, my opinion on the subject has changed. Until rates move upward, I personally believe that financing is the better choice...at least for me. As long as financing isn't used as a way to buy something that one can not afford, today's rates are really a great deal.
"Paying cash" is a great idea and all - but lets say you had to liquidate stock to buy it. You'll be paying the 23% for long term capital gains or even STCG on the money. So, which is better in the long run?
01-13-2015, 10:15 AM
#43
Drifting
1) You think 1130 is a mortgage? Where do you live that you can buy a house for that cheap?
2) Ask the Porsche and Mercedes guys what their car payments are. You think 1130 is a lot? LOL
3) People who don't finance cars when interest rates are this low are people who either have bad credit, don't understand how to use their money in the markets, or are so filthy rich that the investment of $80k makes little impact to their portfolio.
2) Ask the Porsche and Mercedes guys what their car payments are. You think 1130 is a lot? LOL
3) People who don't finance cars when interest rates are this low are people who either have bad credit, don't understand how to use their money in the markets, or are so filthy rich that the investment of $80k makes little impact to their portfolio.
01-13-2015, 12:03 PM
#44
1) You think 1130 is a mortgage? Where do you live that you can buy a house for that cheap?
2) Ask the Porsche and Mercedes guys what their car payments are. You think 1130 is a lot? LOL
3) People who don't finance cars when interest rates are this low are people who either have bad credit, don't understand how to use their money in the markets, or are so filthy rich that the investment of $80k makes little impact to their portfolio.
2) Ask the Porsche and Mercedes guys what their car payments are. You think 1130 is a lot? LOL
3) People who don't finance cars when interest rates are this low are people who either have bad credit, don't understand how to use their money in the markets, or are so filthy rich that the investment of $80k makes little impact to their portfolio.
01-13-2015, 01:59 PM
#45
Burning Brakes
Agree except a couple of things to consider. If you decide to take a big payment, so you can take the cash that you already have and invest it and get a higher return to offset the depreciation and small interest. I totally agree with that strategy. That means 80k in the bank for an 80k loan on the car. If need arises you can always pay the car off with the cash. But if you are taking a 80k loan out and you don't have 80k in the bank to offset the interest and the depreciation, then you are over leveraged and that can cause major financial issues later. for example if you need to dump the car because of the payments. But, if you are under water on the car then you have to sell the car for less than you owe and pay the difference to make up for it, now you get into trouble. also, on the balance sheet you have a big negative depreciating asset and no offset positive cash balance. I believe the best way to do this is to use home equity to buy the car. the interest is deductible from your income (drops you in brackets) and if you have the cash on hand you get the positive return on the cash. plus you own the car outright since it's on the house and if you need to sell the car you can do so with out paying out cash if you are under water on that asset.
Last edited by racezx9; 01-13-2015 at 02:01 PM.
01-13-2015, 06:42 PM
#46
So is $80,000+. BUT...
Only if you can't afford it. At today's interest rates it makes no sense to pay cash financially if you can afford the car. Sure it gives a sense of security and bragging rights, but consider this. Instead of paying cash, $46,000 is borrowed at 1.59%. The stock that would have been sold to pay cash was ~$37 at purchase time last year. It pays ~4% dividend and today's price is ~$51. About a 36% increase not counting the dividend. So instead it is paid out of a total investment return over time to keep the money earning.
If you have the money, whats the difference if you drop $80,000 plus at once or over a period of time if it is invested at a higher return. The difference is you loose money on top of the depreciation you will encounter. Yes, this is one stock and there was a small chance it could go down. But a balanced investment plan will yield much more than the 1.59% in this example. But ya gotta do what ya gotta do that makes sense to you.
This is not directed at you personally although I quoted your post.
Only if you can't afford it. At today's interest rates it makes no sense to pay cash financially if you can afford the car. Sure it gives a sense of security and bragging rights, but consider this. Instead of paying cash, $46,000 is borrowed at 1.59%. The stock that would have been sold to pay cash was ~$37 at purchase time last year. It pays ~4% dividend and today's price is ~$51. About a 36% increase not counting the dividend. So instead it is paid out of a total investment return over time to keep the money earning.
If you have the money, whats the difference if you drop $80,000 plus at once or over a period of time if it is invested at a higher return. The difference is you loose money on top of the depreciation you will encounter. Yes, this is one stock and there was a small chance it could go down. But a balanced investment plan will yield much more than the 1.59% in this example. But ya gotta do what ya gotta do that makes sense to you.
This is not directed at you personally although I quoted your post.
Your hypothesis is "right on the money ( please excuse the pun)."
Another thing to consider: while your stock & bond portfolio is making money, the car will be losing more than ten grand a year in the first couple of years.
01-13-2015, 07:30 PM
#47
Team Owner
Thread Starter
Agree except a couple of things to consider. If you decide to take a big payment, so you can take the cash that you already have and invest it and get a higher return to offset the depreciation and small interest. I totally agree with that strategy. That means 80k in the bank for an 80k loan on the car. If need arises you can always pay the car off with the cash. But if you are taking a 80k loan out and you don't have 80k in the bank to offset the interest and the depreciation, then you are over leveraged and that can cause major financial issues later. for example if you need to dump the car because of the payments. But, if you are under water on the car then you have to sell the car for less than you owe and pay the difference to make up for it, now you get into trouble. also, on the balance sheet you have a big negative depreciating asset and no offset positive cash balance. I believe the best way to do this is to use home equity to buy the car. the interest is deductible from your income (drops you in brackets) and if you have the cash on hand you get the positive return on the cash. plus you own the car outright since it's on the house and if you need to sell the car you can do so with out paying out cash if you are under water on that asset.
First thing it is a higher rate and something happen's there goes your house.
I like to keep some money out and the rest is working some where.
But not to spend on a Z06. I just get the car loan for 1.69 percent.
Just have to pay some down so your never underwater.
Easy to do on great deals used you can find. Harder when you paid MSRP ESP
on loaded cars.
15k down and your good!
Last edited by 3 Z06ZR1; 01-14-2015 at 04:10 AM.
01-13-2015, 07:51 PM
#49
Le Mans Master
As you can realize this goes hand in hand with any car. Depreciation and cost of ownership should be considered a given .
01-13-2015, 09:30 PM
#52
Melting Slicks
And if you track the car that's another $1000+ per weekend. 
Of course posers and waxers will spend less........beer and wax...maybe $50.
Maybe throw in a couple of posters on the wall of Sebring or Laguna Seca.....
Of course posers and waxers will spend less........beer and wax...maybe $50.
Maybe throw in a couple of posters on the wall of Sebring or Laguna Seca.....
01-14-2015, 03:11 PM
#53
Race Director
01-14-2015, 04:31 PM
#54
Instructor
The real question is not how much is your car payment but how long does it take you to earn that much. If you can make $1000 in 4 hours ( and there are plenty of people who can and do) then that's a small car payment for the amount of enjoyment you get in return. If it takes 2 weeks then I'd be buying something else.
01-14-2015, 06:26 PM
#57
Some people forget when they talk mortgages, car payments, etc that income plays a big part in the conversation. People in LA or NYC say they'd kill for a <$1000 mortgage, but they never acknowledge the fact that they probably make 3-4x the money those of us with this kind of mortgage make. In my area, an average size house (1800-2500sqft) can be had for $1000 or less, and be on a full acre of land or more. But most people with normal jobs only clear $30-35k a year. I'm fortunate enough to have one of the higher paying jobs in a pretty wide radius (not counting MDs, surgeons, etc.) but still couldn't swing these $4000/month mortgages posted here. It's also why a $100k car is no big deal to some, but in my area, I was talked about like I just drove up in a Ferrari when I came home with a $45k GS, haha! So it's all about the numbers, and they vary tremendously depending on location!
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01-14-2015, 06:44 PM
#58
Le Mans Master
01-14-2015, 06:46 PM
#59
Le Mans Master
01-14-2015, 06:59 PM
#60
Burning Brakes
1st I'll say I'm a younger guy and see there are a ton of smart guys on here that know a lot and I may have to ask for some good advice about mutual funds and things like that to make more money. I've done ok and saved a fair amount but don't know a lot about how to make more money with it! I'm just about to move to a new house once I sell my first house I'll have enough to purchased a Z outright but to me its much easier to put a chunk down, have reasonable payment and have plenty of reserves available, if god forbid something happens. I'm definitely not old enough or making enough to purchase this car cash outright and justify it. But at the same time a wise women told me "your hear for a good time, not a long time." I understand not putting yourself in a financial hardship but the money doesn't get to go with you when you move on!