Cash, Straight Finance or Lease 08 GT3?
#16
Originally I thought "just buy it for cash if you have it". If something comes up, you can always take out a line of credit on the house. But if you can beat 5 to 6% loan, you can do the same or better in safe CD's and have the peace of mind that you have money in the bank working for you. ).
Not fair to compare the tax consequences of an investment with depreciation. This is b/c whether you put the money in an investment or to pay off the car, you will feel the *same* depreciation hit. So, with a CD you get to incur both depreciation and a tax hit.
#17
Frayed, we agree on most things. Obviously buying a new vs. 2 year old GT3 will have depreciation hits, but buying a GT3 in the first place is not a rational, but rather emotional buy, so you have to expect to have to pay something along the way somewhere.
BTW, no state tax in Nevada, Florida, Texas, am I missing any?
BTW, no state tax in Nevada, Florida, Texas, am I missing any?
#18
Nevertheless, too many people finance them with fuzzy math. Nothing magical about the true cost of not paying cash. Key questions are, can you pay cash? If so would do you need that cash in reserves? Are you confident that you can beat your car's interest rate + your marginal tax rate in an investment?
I'm no financial guru, but did purchase a number of expensive cars in quick succession only to have now exited the game with the sale of my GT3. Each time I thought through the cash/finance issues.
More info here:
http://www.taxadmin.org/fta/rate/ind_inc.pdf
#22
Without understanding your finances, that is a very difficult question. Tax bracket, self-employment, corporate structure and potential business use are very important when deciding. If none of those play a roll, the buy it cash. If you need the cash back that bad in the future, you can always refinance.
#23
If you're going to take it to race tracks, DE, autocross, or any other kind of motorsport, then lease it, because it will depreciate at a faster pace than the Garage Queens.
If you're going to have a Garage Queen, then finance it with at least 30% down, so in case something bad happens, the car can be sold immediately without being upside down. Take the other 70% to combined investments in foreign currencies, and be sure to take advantage of the Cayman Islands Banking system.
If you're going to have a Garage Queen, then finance it with at least 30% down, so in case something bad happens, the car can be sold immediately without being upside down. Take the other 70% to combined investments in foreign currencies, and be sure to take advantage of the Cayman Islands Banking system.
#24
Without understanding your finances, that is a very difficult question. Tax bracket, self-employment, corporate structure and potential business use are very important when deciding. If none of those play a roll, the buy it cash. If you need the cash back that bad in the future, you can always refinance.
- Partner at a LLP (read: self employed)
- can deduct a PORTION of the lease as business expense for travel to client sites, but not big enough $$ to really sway the decision...and not really how i will be using the car
i have the cash to do this, just not sure that tying up so much cash in a car is the right thing to do (kind of the essence of this post -- CASH buy vs. lease/finance this type of car)
#25
- take it up the you know what tax bracket
- Partner at a LLP (read: self employed)
- can deduct a PORTION of the lease as business expense for travel to client sites, but not big enough $$ to really sway the decision...and not really how i will be using the car
i have the cash to do this, just not sure that tying up so much cash in a car is the right thing to do (kind of the essence of this post -- CASH buy vs. lease/finance this type of car)
- Partner at a LLP (read: self employed)
- can deduct a PORTION of the lease as business expense for travel to client sites, but not big enough $$ to really sway the decision...and not really how i will be using the car
i have the cash to do this, just not sure that tying up so much cash in a car is the right thing to do (kind of the essence of this post -- CASH buy vs. lease/finance this type of car)
Best finance rates are around 7 on a Porsche. You are probably not making even close to that if the money you are talking about is truly in cash form. Probably more like 4 on a good day.
I think the smart thing to do is buy the car cash. You seem to think about things enough, so I am sure the rest of your life is in order. After all, like I said previously if something goes wrong you can re-finance the car with a local bank to pull some immediate cash.
I don't always follow the advice, but pay cash for items that depreciate and finance those that appreciate.