Hey Guys,

I'm considering paying cash for used 997TT right now. I really believe that the economy is going to slip farther, so I'd like to have cash to scoop up screaming good deals on both a car AND stocks.

The problem is that (of course) I'm impatient and want the car NOW.

What would you all do?

1) Pay cash just to avoid an extra monthly payment. I have both fixed and variable income (sales), so I could support a car payment, but I like the idea of not having one.
2) Just suck it up and wait hoping that my gains will help ultimately pay for the car?
3) Get some kind of financing arrangement and pay it all off in a year.


Option 3 seems to be the best choice for an instant gratification kind of guy. I'm sure you've all debated this at various times. What did you all do during the last recession?

 

Yep, #3

The interest rate will be really low anyway, you'll be able to maintain your cash on-hand, and if sales are down you can keep the loan longer if things get tight.

 

I would look at how much the car costs with a loan vs bought cash.

Then compare that to what the money could be doing for you in other areas.

You didn't mention if you where shopping new or used. But obviously used TT's are going to get cheaper the longer you wait to buy one :P

I was kinda in the same boat as you. I am very risk adverse and I couldn't find anything safe to put money into for a short amount of time that would return any kind of worth while gains. I found a good deal and jumped on it. No loan. Little to no regrets. Sometimes I wonder if it would have been more fun to get something like a lotus elise or exige and another enthusiast car like a evo, sti or m3, etc. But I love the turbo!

 

Figure what you would pay in interest and if you can do better that that from an investment then finance it. If not pay cash. It's a depreciating asset regardless.

 

Definitely going for a 997.1. That initial depreciation hit would just make me too sad.

My issue is that I'm having trouble estimating would a potential investment would be worth. At this point, I'm just watching the market collapse and smiling, so giving up 80k worth of buying power is really tough for me.

I'd like to believe I could easily beat the low financing rates that are being offered right now, but who knows. Maybe buying a 911 turbo is just diversyfing my portfolio (i.e- losing a semi known amount of money)

 

#3 is the best option based on what you described

 

Yes, but it is "My" brand new, never driven by anyone else depreciating asset. I think of it as another tax.

 

Like you, I believe the market gets worse before it gets better - so good companies/stocks are going to get cheaper. Seeing it already with a few industrial companies missing 3Q expectations and their stocks getting crushed. With reporting season upon us you wont have to wait long. So I'd hold your cash for the next 30 days and see what happens. As far as the car is concerned, its a funny time. The lack of OEMs made in 2008 and early 2010 means prices for used are high and unlikely to come down significantly soon. So from a financial perspective, I dont think you lose anything by waiting. But that might not be good enough for a guy that wants a car NOW. I feel your pain.

 

Buying a car is never a good investment, unless it's a collectable, which a 997tt is not.
I would lease it thru my biz with pretax dollars, minimal cash outlay, invest the money in something else.

 

See if you can do better "on a risk adjusted basis.". No investment today will get you 4% + return with no risk. Doesn't exist.

 

Pay 1/2 in cash, finance the other 1/2 at 2%. You'll get your money back in full after depreciation should you sell it, and you'll still have a nice lump of case to invest...

 

The rates are so low that it is almost free to borrow money. Keep your liquid!

 

you guys must have hella good credit to get free or next to free financing like that. 2% is crazy low.

for the OP, I guess it's all about the mix of how you value owning the car now and not having the risk of a further market decline versus the potential upside of a market rebound and growth that could potentially leave you thinking that it would have been better to invest the money.

basically, are your investments going to perform significantly better than what you'd pay in interest on financing a turbo? If the differential is only a few points, then it's all about how much you'd rather not have that car payment.

when I bought my car 2 years ago I couldn't get a good rate from anyone on a loan (because it was an '01 mostly) meaning that I was paying 9%. I could have outperformed that by just paying off my mortgage faster...

 

Long term financing. Can't beat 2-4% and have your cash too.

 

i second that approach