A&Q about Lotus
Q:
Originally Posted by SAElise
How is that possible?
There were leases on the Gallardo advertised at $900/mo in the DuPont registry back when I last checked about 6 months ago.
edit: I think that was with $15k down.
A:
allen: investing in real estate with your elise money is not a sure thing. A CD is, which turns your profit into a loss.
A:
Financed half and paid off early.
A:
Originally Posted by 911EATER
allen: investing in real estate with your elise money is not a sure thing. A CD is, which turns your profit into a loss.
Maybe not, but he's talking about rental property. Why stick your money in a CD? Sure its a guaranteed rate of return, but there's better options.
A:
Originally Posted by zvezdah1
I'm poor, have a small penis, and even smaller income, I financed my elise!! yea~~
Chris, you made me laugh harder than I have in a long time!!! Bravo!
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60K downpayment.
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what, rental property does not ever go down in value?
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and rental property always has a paying renter?
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I too paid upfront for my Lotus. Had I not been able to do so, I would have found a way to pay less for a different car (Miata, my existing Mustang, mr2, etc) to use as a track toy.
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it all depends on your IRR - internal rate of return. I have financed vehicles before even if I had the cash to buy them outright, because I can make a higher return putting that cash somewhere else, than what I pay in interest on the vehicle loan.
The issue is not that one is inherently better than the other, or how the asset depreciates (you are still paying the loan back so what difference does it make?) The problem remains, that if you are financing (or leasing) because you don't have the money to pay for the car in the first place...AAGGH!!.. that's a bad decision any way you look at it... sure-fire way to poverty baby
A:
I'll add that this is both the beauty and ugliness of the american economy. It steamrolls ahead and grows because it's financed by short-sighted people with cheap access to money. What good is it if you're just increasing your debt to grow an economy... we are the most indebted people in the world on the whole... but I'm sure no one is reading at this point because you've been bored to tears about this so I'll get off my soap box.
A:
You can't win with this group.
Finance the car = you can't afford it.
Pay cash = you're stupid because the money could be invested.
I was just looking at the "Post Pics Of Your New Elise" thread & it seems to me that some people live in really nice places with really nice houses & some live in very modest house in fairly affordable towns. This just goes to show that everyone has different circumstances.
If I paid cash but live in a $150k condo, does that make it okay?
If I financed but live in a $2M home, does that make it okay?
I don't think there can be a clear rule here. If you won't miss the money (either monthly or in full) then I believe you can afford the car. Is it a wise way to spend your money. Absolutely not.
A:
Paying for things varies by situation. I lease some cars through my business, I pay cash for others and even finance one. All of these have a purpose and are done for a reason. No one should tell someone else what he/she can/cannot afford or how to pay for their items or what to prioritize in their finances. To each his own. If you're old enough to drive, you're old enough to spend your own money as you see fit. As long as everyone is safe and having fun.
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The real problem are the people who rent 150K condos and also leased or put next to nothing down on an Elise.
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Originally Posted by afborroni
I'll add that this is both the beauty and ugliness of the american economy. It steamrolls ahead and grows because it's financed by short-sighted people with cheap access to money. What good is it if you're just increasing your debt to grow an economy... we are the most indebted people in the world on the whole... but I'm sure no one is reading at this point because you've been bored to tears about this so I'll get off my soap box.
(i read your whole post, and...) i can agree with that. admittedly, i've made my financial mistakes when i was young, and thankfully they were fairly small. the lesson was, however, learned, and will not be wasted on an extravagance if it would stress my current financial portrait.
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I think I am probably like most people. It takes an effort to save 50K and I am less likely to save it at $650 a month. Therefore taking a loan and keeping the 50K in the bank was wise. Although I had/have the cash, I chose to borrow it at as low a rate as I could find. I'll probably pay the loan off early, but I won't do so by touching the principal of my cash assets. To me that makes sense. I am saving for retirement but still make enough to afford $650 a month without thinking too much about it.
It's a truly whatever works for you situation. But, nonetheless, for many people a $50K purchase is significant, especially if it is for a second car that many would consider a toy.
A:
Originally Posted by 911EATER
The real problem are the people who rent 150K condos and also leased or put next to nothing down on an Elise.
Really? And why are such people a real problem?
I put next to nothing down on my Exige. I rent a "condo" that would go for many times more than 150k. I could have paid cash for the Exige. According to you I'm a real problem. Gee, thanks.
I think the real problem are people who make blanket statements with no real facts.
A:
Originally Posted by Randy Chase
Threw me off too. I fixed it.
I don't understand the thing about declining value having anything to do with how you paid for the car. If I financed $50K or paid cash, it has the same effect, no?
I should note that for me, the depreciation on the car seems in line with what one would normally expect, and has zero impact on me until the point I sell it, which is not soon... so I really do not care.
I think buying a car with cash is good ONLY IF you plan on keeping it longer than a loan term. Obviously this is the smart choice because you won't pay any interest. On the other hand, many financial gurus say to get a car with the lowest payment possible if you plan on trading the car. Whatever works for ya!
If you have the cash and 50k is like blowing 50 bucks, then by all means pay cash. Some people make the mistake of blowing all their liquid in order to save on interest costs. Even rich dudes finance in order to let the bank take the hit in case of trade/sale
A:
Originally Posted by joe13531
Even rich dudes finance in order to let the bank take the hit in case of trade/sale
I am still trying to wrap my mind around this.
You finance $50K and decide in 3 months to sell the car and you owe more than the value. How does the bank take the hit? They make less money off the interest, but then you used the money for a shorter period, so that is a wash. You don't pass on the loss to them for the reduced value right?
A:
Originally Posted by Randy Chase
I am still trying to wrap my mind around this.
You finance $50K and decide in 3 months to sell the car and you owe more than the value. How does the bank take the hit? They make less money off the interest, but then you used the money for a shorter period, so that is a wash. You don't pass on the loss to them for the reduced value right?
I confused myself too with that one Randy. Don't ask. Next time, know what I am thinking, not what I write!