The opportunity cost mentioned above is something you are failing to grasp. Its not that you are spending all of your money on another investment, yet still want to purchase a 996TT. Instead its the notion of actually "making money" by financing at a rate lower than you can earn on another investment.

If I spend $50k on a 996TT and pay 3.9% for 4 years, I am looking at a total cost of $54,050...so you only "lose" $4,050 by financing the car.

If you have an investment opportunity paying out 6% each year on the same $50k that you didn't "pay cash" with for the 996TT, you will make $3k per year or more than $12k over the term of the auto loan (and you have just made $8k over "paying cash" up front for the 996TT)

Just FYI....

 

Yes but after Capital gains tax your 8K will be 6K....and people tend to be overly optimistic about how much their investments will make.

I financed my Merc, but mainly because I got 1.9%. I drive it to work so I use it to make money.

I have a personal rule and that is to only pay cash for my weekend/hobby/race cars.

 

I have to say that I agree with your statement for the most part. However their is a huge difference between the financing practices that have been happening in this country and financing a car. I would have to agree that it is a bad idea to finance a 996tt to the extent of not being able to afford the payments and the maintenance required and additional life expenses. It is however possibly and feasible to finance a Porsche and have a large enough reserve set aside for any such maintenance expenses without putting yourself in the poor house. You have to face the facts that you are not investing in anything other than transportation with a car. The other things that come with said brand and type of car are a bonus If it came down to spending 40k cash on a car or keeping that 40k cash in the bank and getting a reasonable loan on the car, I would keep the cash in the bank for investment opportunities. Money can make money, cars can't. To each is their own though.

 

Agreed....and I try to budget that my investments will average 5%/year, but as we all know, that isn't guaranteed. That said, I have had past years of 8%+ (granted, I am young and am investing no where near what some people here are).