Cash or Finance?
let park, then back home. Must take his own car to park at the school dance itself...
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I'm sure he's a very smart, responsible kid.
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When I had my prom my uncle made a joke asking if I wanted to use his 996TT which was only a little over a year old at the time. If he was serious I would have ditched my date and drove that all evening in my tux. Screw the dinner or the prom.
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Its not a huge savings and the Audit risks aren't worth the headaches.
2 big red flags for the IRS, 1) home office 2) car's
If you make the money you need to in order to drive one of these cars, I would need someone to demonstrate the incredible tax savings. If RSM can't show me, then I need to use who ever you guys are.
2 big red flags for the IRS, 1) home office 2) car's
If you make the money you need to in order to drive one of these cars, I would need someone to demonstrate the incredible tax savings. If RSM can't show me, then I need to use who ever you guys are.
Hey Canon, for what it's worth, here's my (long-winded) philosophy, which may sound somewhat counterintuitive -- all in the context that Porsche now provides some great lease and financing rates (3.5% I think):
1. If buying it with cash would NEVER pose a financial problem in your life AND you are NOT sure if you want to keep the car for at least 3 years, then FINANCE it at a low rate. You should never tie up money in a depreciating asset. I don’t care how rich you are, you should only buy it in cash if very low financing is not offered, because you should reasonably be able to do better than 3.5% by investing it (whether in your business, markets, etc. – and I don’t mean hand it over to an incompetent “money manager” who barely went to college and learned some stupid asset allocation formula).
<O></O>
2. If you CANNOT afford to buy it with cash yet but you can EASILY afford the payments AND you are absolutely sure you would keep the car for at least 3 years, then LEASE it. The only difference between leasing and buying in this case is that buying will put more debt on your personal balance sheet. Today, you can lease these cars and then buy it out at the end of the lease (if you still want it) for less than the MSRP since they are discounting the cars so much. By leasing, you can also beat the crap out of the car with no sentimental worries. You will lose at least as much as the lease if you were to buy it (whether cash or financed) given the state of the world economy and the number of 997s on eBay.
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3. If the payments worry you at all, then just don’t get the car. This world is not a good place right now and you don’t really need the car.
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4. Even if you CAN afford to buy it in cash, if you would be happy keeping it as a daily driver for at least 3 years, I would recommend a LEASE given the current low lease rates – it provides the peace of mind and an emotional detachment that allows you to get more carefree use out of it. There is nothing wrong with leasing it – if you knew that your house would never appreciate in value, would you buy or rent? I would gladly rent (pay for the usage I require) and let someone else worry about the value of the asset. Most of us bought homes 1) because we thought they would appreciate, 2) because the house you wanted was not available as a rental, or 3) because we need to live somewhere long-term.
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5. If 1) you can afford it, 2) you are philosophically against debt, and 3) you like buying things for long-term sentimental value and passing it on to your kids, then just pay cash and be done with it. But this is not a financial decision but a deliberate decision to pay for something based on your personal values. How cool would it be for your kid to inherit a totally babied 997TT 20 years from now? That’s PRICELESS.
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In my specific case, #5 applied to my 09 997TT (plus super-low financing was not being offered at the time), and #4 applied to my 09 CTTS because I got 20% off MSRP and I didn’t need to own something my 1-year old would crap and throw up all over (and I could always buy it out at the end of the lease if it doesn’t stink of baby crap-puke). Also, if you are married, always LEASE your spouse’s vehicle because she WILL damage it.
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Good luck and congrats in advance.
1. If buying it with cash would NEVER pose a financial problem in your life AND you are NOT sure if you want to keep the car for at least 3 years, then FINANCE it at a low rate. You should never tie up money in a depreciating asset. I don’t care how rich you are, you should only buy it in cash if very low financing is not offered, because you should reasonably be able to do better than 3.5% by investing it (whether in your business, markets, etc. – and I don’t mean hand it over to an incompetent “money manager” who barely went to college and learned some stupid asset allocation formula).
<O></O>
2. If you CANNOT afford to buy it with cash yet but you can EASILY afford the payments AND you are absolutely sure you would keep the car for at least 3 years, then LEASE it. The only difference between leasing and buying in this case is that buying will put more debt on your personal balance sheet. Today, you can lease these cars and then buy it out at the end of the lease (if you still want it) for less than the MSRP since they are discounting the cars so much. By leasing, you can also beat the crap out of the car with no sentimental worries. You will lose at least as much as the lease if you were to buy it (whether cash or financed) given the state of the world economy and the number of 997s on eBay.
<O></O>
3. If the payments worry you at all, then just don’t get the car. This world is not a good place right now and you don’t really need the car.
<O></O>
4. Even if you CAN afford to buy it in cash, if you would be happy keeping it as a daily driver for at least 3 years, I would recommend a LEASE given the current low lease rates – it provides the peace of mind and an emotional detachment that allows you to get more carefree use out of it. There is nothing wrong with leasing it – if you knew that your house would never appreciate in value, would you buy or rent? I would gladly rent (pay for the usage I require) and let someone else worry about the value of the asset. Most of us bought homes 1) because we thought they would appreciate, 2) because the house you wanted was not available as a rental, or 3) because we need to live somewhere long-term.
<O></O>
5. If 1) you can afford it, 2) you are philosophically against debt, and 3) you like buying things for long-term sentimental value and passing it on to your kids, then just pay cash and be done with it. But this is not a financial decision but a deliberate decision to pay for something based on your personal values. How cool would it be for your kid to inherit a totally babied 997TT 20 years from now? That’s PRICELESS.
<O></O>
In my specific case, #5 applied to my 09 997TT (plus super-low financing was not being offered at the time), and #4 applied to my 09 CTTS because I got 20% off MSRP and I didn’t need to own something my 1-year old would crap and throw up all over (and I could always buy it out at the end of the lease if it doesn’t stink of baby crap-puke). Also, if you are married, always LEASE your spouse’s vehicle because she WILL damage it.
<O></O>
Good luck and congrats in advance.
2. Leasing; I dont think I wanna get involved with a lease for the fact that I don't want a new 09 car. Its not that I cannot afford the payment its just that I'd rather get an 07 depreciated tt for 80k, and make finance payments on it.
3. You're right, but in my case the payment isnt worrying in the sense that it's not affordable, but I don't feel right/confortable spending upwards of 1500-2000 a month on car. Especially at my age. (I'm comfortable with a 1200 payment which would be about a 60k loan).
4. Again no I cannot afford to pay cash for a car this high price. And leasin may not be an option considering I will be making payments higher then I want to. Unless I can get a lease at 1200 a month I'll have to say no thank and go for a purchase on a 07.
5. Doesn't really apply to my situation, I don't plan on keeping this car that long... Also, I have no children nor am I married. Hell I'm not even planning that far ahead, I don't wanna be hithced until late 20s. So If I were to get married at 27, have a kid at 30, that means that my kid would be able to drive this 997tt in 2034: LOL
Edit: And LOL at leasing your spouse's car. My ex-gf would be a prime example of why.
Also thank you for your write up, I've read it a few times to make sure I fully understand it all.
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Canon, you are very fortunate to be able to experience and afford these cars in your early twenties -- you should cherish that in safety and good health. If I could have afforded it 10 years ago around your age, I would have been too rash and foolish to even seek the opinions of others. Haha.
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Canon, you are very fortunate to be able to experience and afford these cars in your early twenties -- you should cherish that in safety and good health. If I could have afforded it 10 years ago around your age, I would have been too rash and foolish to even seek the opinions of others. Haha.
Also, you're not doing too bad yourself, at low 30's you have quite a lineup
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