Purple92

[QUOTE=qwiketz;1596659615]You're on the right track. There is already talk of future defaults with all the inflation in car prices (high purchase prices) combined with very low down payments. Lenders are going to start figuring where they want to draw the line.

QUOTE]

Two things: 1) Depending on what dark corners of the Internet you chose to venture onto - you might (or might not) be surprised to hear that there are already auto loan default problems showing up. Over the last "few" years - auto sellers are having to "lower" their loan standards to keep moving the iron. So - while many (most) of the people reading this probably have above average credit - there are problems out in the rest of the world. If you want proof - pick up a newspaper, and look at the ads from the auto sellers (both dealers and non-dealers). I'll bet that most (if not all) say something like "Everybody Gets Financed" in type that's as large as anything else in the ad. Part of the problem is that many people are underwater on their car loan / lease - or they took out such a long term loan (to keep the payments down) that when they turn in or trade in their old car - they need to come up with significant amounts of $$$ to get back to zero. Well, as many of you might have heard - only 40% or so of American households can come up with the $$$ to meet an unexpected $1,000 expense. So - when the lease turn in day comes - and you're 10,000 miles over - at $0.25 mile - the dealer says - that'll be $2,500. (or when they go to trade in the 5 year old car they bought used with a 5 year loan - the car value is well less than the outstanding loan value). Most people don't have that $$$$ - so they do the only thing they can - they roll the $$$ into the new loan / lease payment. Guess what - it tends to make the new payment rather unaffordable - and hence the increasing defaults.

2) While I agree that if you can borrow money for less than you can get in investment return - it makes little sense to use "your" money to buy anything that you can borrow money to purchase. BUT - Eco 201 - any rate of return higher than a Treasury Bill is considered to be a "Risk Premium". So - essentially - you are being paid more than a "perfectly safe investment" because of the perceived risk of the investment. So - if you're getting 7% returns - great - but understand that you are exposing yourself to additional risk. Now - we all know that things have been going pretty well lately - but if you really believe what some of the talking heads on the Business shows are saying about there being "no headwinds" in the economy - I've got a bridge to sell you. If you question that - ask yourself how the people that invested in Puerto Rico, Detroit or Stockton CA Muni-bonds did - or how the guys who bought GE stock are doing ????

DRLC5

Money is cheap now, I do what a lot of wealthy people do, Use the banks money. At 150k I'm making good money each month. why would I pull out 150k to by a car that will drop 30k as soon as I drive off the lot? My credit union is at 1.9%, I will use there money and let my money keep working.

ZoratZ06

Everyone is different. I don't want this to come off the wrong way, but in my experience people with 'real' money hardly finance anything regardless of the rate. Sure, on paper it seems like a good thing to do, get a .9% or 1.9% rate, then take the $150k and invest it and hopefully return 7-10% elsewhere etc. Personally I haven't met anyone with genuinely significant money that does that. They pay CASH for almost everything they buy, including expensive homes, cars, boats, jets etc. I am sure there is a segment of celebrities, athletes etc. that lease everything...but most people I know with serious money are self made and HATE debt unless it's business debt to grow and make more money, but personal debt for 'toys' is 99.9% cash.

I'm not in any way 'knocking' or trying to disrespect anyone for their personal decisions, and I am completely aware that not everyone is in the position to pay cash. I am generally commenting to the folks who say they would rather take the banks 1.9% etc. and then invest the $150k at 8% etc. I think that fits a certain bracket of people, but once you get above that bracket, it's cash. Obviously there are exceptions. At the end of the day, everyone needs to do what they think is best with their money. Life is short.

Paulchristian

I predict the ZR1 will be a massive sales disappointment with people holding their money until they see the Mid engine. Wait a bit, you should be able to get a really good deal. $145k is insane....they did you a favor. Consider yourself touched by your guardian angel...

NoOne

But you've got 147K left for a lawyer to deal with the insurance if there is a problem.

awright2009

danm1

Now that I've gotten past my original enthusiasm and overzealousness I believe you're right. Patience will get me a much better deal. That's a great point you brought up, with all the people waiting in the wings, and saving their coin, for the arrival of the ME, many of these folks may be taking a pass on the new ZR1.

3 Z06ZR1

No way possible to borrow 147k on 1 ZR1!

3 Z06ZR1

Nope 1.9 has been done. 2.25 is new best on a car with a checking account

Suns_PSD

This has sort of been my experience as well knowing a few rich dudes.

It's not like that 8% is a sure thing, the stock market bombs every few years and frankly it's due. I think late '19 to early '20 there will a significant 'correction' as they like to say. If you drive your ZR1, and the economy tanks, you might still owe lots of money on a heavily depreciated car. Also a car that expensive is too pricey to take to the track, because your insurance will not cover it there.

I think we have a lot of guys that are in about my position around here, they've done well, but we are all pip squeaks when comes to real money. Most of us can't go right a check to pay for a great 6 figure investment opportunity or whatever (cue those saying 'I can!'). I know people have different risk tolerances for sure as I'm very risk averse.

I do suspect that the ZR1 will be the last and ultimate expression of the rear wheel drive, stick shift, analog sports car to possibly ever be built surpassing the Viper. Cars that perform better will be ME/ DCT/ Hybrid if at all and frankly in 30 years most of the planet will be an autonomous driving car world. This really is the ultimate expression of this sort of car imo. *** now I want to go finance one...

Leonrojo

Leonrojo

NocarbutaVetteforme

Plus I would venture that most who could drop down $150,000 cash for a car wouldn't. Why not put that cash to work for you instead of letting the bank do it? I would rather invest that cash and use the cheap rates to finance. You can tie up a much more expensive piece of property versus being able to say you have that car paid off.

NocarbutaVetteforme

Have seen 2.15 and 2.00 today so that number is incorrect. And I'm sure there are lower rates out there.

NocarbutaVetteforme

If I listened to people like this then I wouldn't have the investment properties that I have. As has been stated by others, use your money/cash for investments (down payments) and use the low financing for toys that won't earn money. That $150,000 cash could be used to buy (5) rental properties and pay $30,000 down on each one and not have to pay PMI thus improving your cash flow. And in the end you tied up $750,000 worth of properties, each one earning income as well.

NocarbutaVetteforme

Spoken like an investor!!

I made over 22% the last 12 months and over 25% the 12 months before that in the markets and prefer to use my cash to make more money with investments and such.

ZoratZ06

Honestly I think you missed the point entirely. The point was, people with 'real' money simply don't do those things. If you're talking about $150k for 5 rental property down payments then my statement doesn't apply to you because you're clearly not in the position to 'not care about' $150k. That's not being disrespectful, that's simply saying that $150k means enough to you that you can't justify using it for a car. Not that you can't do it...you can't JUSTIFY it. There's a difference.

I'm gonna use an obnoxious example to make a point...Do you think Bill Gates would finance a ZR1 just so he could 'use the banks money?' Doubt it. I get the example is over the top...but it also applies to people with $30m, $50m or $100m and even less at times. That was my point. If you re-read it, you'll see that. If you do care 'that' much about $150k then you're not in that bracket yet, which I also stated in my post.

Leonrojo

NocarbutaVetteforme

Actually I am in that bracket that I could drop that kind of money down if I wanted to and not flinch but the type of person that I am is not indicative on if I am a fool and part ways with my money in such a wasteful manner. I have friends that would rather drop the cash down to pay for said vehicle just because they don't want a car payment and to say it is paid off. I always ask them the same question. Why let the bank use your money when you can use it. Whether it be a lake house or any other piece of real estate that I own, I would rather know that I made the most out of my money. By the way it is called leveraging. And when talking about paying for something in cash. Don't just stop at cars. Use houses as an example as well.

https://www.quora.com/Do-rich-people...r-home-in-full

https://www.csmonitor.com/Business/2...re-need-a-loan

I guarantee you that some people who have the money still think that their money is a tool to make more money and that just because they have it, they don't blow it. Myself and friends I know who all have considerable amounts of money, who could easily drop double that amount would invest that cash rather than miss an opportunity to make more money than pay cash for said vehicle.
What you need to realize is that some people who have money might do that but not all people. As for using people like Gates or Buffet as examples is completely contrary to most people. In fact, Everything is relevant.
I have many friends that have much more than you stated and they still finance a car. Why? Because they are all about paying the least that they have to and maximizing the money that they have.

As for using the money for 5 houses as investments, why wouldn't I maximize my investment versus wasting the cash on a car? As stated, I tied up $750,000 worth of assets while you would be driving around in a paid off depreciating car. We are obviously different because I would rather have more than waste what I have. I would much rather buy the 5 $150,000 than buy the car just so I could say I paid cash for it. Different strokes for different folks but not everyone who has the cash to easily pay off a car does it.

SOMETHING you may want and most likely need to read:

https://www.earlytorise.com/how-weal...get-wealthier/

Leonrojo