Porsche addiction - how much is too much?

[jrdavid68]

I have wanted a 356 for several years now. More than that, I want one restored by a particular mechanic in the SF Bay area. I know that if he restored the car, everything is perfect down to the correct nut and bolt that should be on the car.

I now have the opportunity to buy a '64 coupe that he has restored. The previous owner (RIP) participated in the restoration, but all of his work was done under the mechanic’s close supervision. Everything is as it should be with a purchase like this – a documented w/pictures rotisserie restoration, all matching numbers, fairly recent paint in the original color (a couple minor door dings), even the clock works. The car needs nothing! I even had the opportunity to meet the previous owner on a couple occasions – he was one of the good guys.

In order for me to buy the car, I would need to use my HELOC for most of the purchase. I currently have a balance on the HELOC that I should have paid off by mid 2009. This would definitely extend the payoff for a couple more years.

My wife says, “Just buy the damn car!” (she’s a keeper). However, I’m the one that handles the finances and I am agonizing over buying a 44 year old car, that would only be taken out on sunny weekend days, and having to borrow to do it. On the other hand, if I look back in ten or twenty years, will it be one of those “should’ve, could’ve” scenarios if I don’t buy it?

So, I’m open to opinions for or against.

[rammstein]

You are probably asking the wrong crowd if you are looking to be talked out of it. I saw a real life 356 on the highway here last month- man, its a very pretty car. Makes purty sounds too...

You should be able to get back what you paid for it someday, right?

[Paul K]

Honestly, how happy will you be to own this car vs. unhappy to have missed out? Are all the years of fantasizing likely to become a reality?

Cheers,

Paul.

[cantdrv55]

I feel like a hypocrite telling you this since I own two 911s but, unless your job is recession proof, I would hold on to my money.

[HardDrive]

Everyone is different.

I agonized over buying me first Porsche, and I did feel some guilt about spending $11k of the familys money when I did. But I REALLY got a lot of enjoyment out of the car, and I really enjoy driving my current car.

So 'know thy self'.

Is the price right? If the answer is yes, then I don't see a huge risk here. Just sell it if it doesn't float your boat.

[jrdavid68]

Originally Posted by Wayne at Pelican Parts

If you're really crazy, you can justify it by saying that you are "diversifying your portfolio" against market forces, etc. I've used that argument on myself before...

-Wayne

"diversifying your portfolio" - I like it!

Chris - I hear you loud and clear. That is definitely one of my concerns.

My price would be about $5-10K below what I feel is the high end market value for it today. So if I had to sell it, I'm fairly confident I could get all or at least most of it back even in a quick sell. The goal would be to never sell and pass it on to my son one day (he's now all of 14 months).

If I bought it using the HELOC, and considering the recent decline in housing prices around here, I would still be at about 70% loan to value on the house when combining the 1st with the HELOC.

[livi]

If it makes you happy and you can afford it. Life is short. Listen to your gem for a wife.

[WolfeMacleod]

When your goal is like mine, it may be too much.
My goal is to own one of each older "lineage" - rear engine, front engine 4cyl, front engine 8 cyl, mid engine, and the 356, of course.

911
944
928
914
356

would like a 912 as well, but I consider it covered by the 911's rear engine layout and body.

not missing any, am I?

[Porsche-O-Phile]

Normally, I'd say "get the car" but using a HELOC? Are you insane?

Save up until you have the $$$ to get it, then get it. A car is one of those things that debt should never be used to pay for if avoidable.

All it takes is one idiot SUV-driver on a cell phone and that car will be a pile of scrap metal and you'll be in a deep pile of doo-doo financially. Don't expect insurance to cover the price unless you're lucky. Getting full purchase price value on a pay-out would be difficult to do.

Save your equity. We're going into a recession and you might need it for something more important.

A house is not an ATM. Stop thinking of it that way - even for a Porsche.

[Aurel]

Originally Posted by WolfeMacleod

When your goal is like mine, it may be too much.
My goal is to own one of each older "lineage" - rear engine, front engine 4cyl, front engine 8 cyl, mid engine, and the 356, of course.

911
944
928
914
356

would like a 912 as well, but I consider it covered by the 911's rear engine layout and body.

not missing any, am I?

You missed the 968 and 959

Aurel

[Tobra]

It is not that tough to get a stated value policy on a classic car. If you are obsessed with getting a car restored in one particular harbor(so to speak) buy it, how many chances are you going to get?

[Christien]

I kind of agree with Jeff here. Taking out a home equity loan to buy an unnecessary car doesn't seem like the best of ideas, especially with the way the US economy is looking right now. (would be different if you needed the car to get to work to earn a living) But I think if you can plan it right, expect the economy to tank, look at how that affects housing values, look at worst-likely-case scenarios for your employment future, when the HELOC will be paid off, and still have the numbers come out right, you should be fine.

I wouldn't ever jeopardize my family's well-being (or even comfort) on a luxury item, but we all know that realizing a dream can mean so much more than just a car. And like you said, with a car such as a vintage 356, with all the right things in place, you don't get a chance very often. So if you can do it safely, with careful planning, and with the blessing of your wife, maybe you can make it work.

[Rot 911]

Read this thread of mine from last year and let me know if it helps.

Two Guys, One Porsche 356C and 1057 Miles

[onewhippedpuppy]

Borrowing against your HOUSE to purchase a TOY is not a good idea. TOY > HOUSE? That's why I have a house but no toys, I can't afford to pay cash for the toys. Sure, you'll love the car, and it might slowly appreciate in value. But, imagine the guilt if it contributes to putting your family in a tough financial position. It's just a car, there's always another one.

[LakeCleElum]

I know a lot of people that want to retire, but over the years, they've used their home equity like "FREE MONEY".......Vacations, Suv's, Jet ski's, just borrow against the equity.

Now, with the declining housing market, some want to retire, but they owe more than their home than it is worth.....You may be young and figure you'll pay if off in a few years, but it's a dangerous "mind-set" IMO

I paid my 2nd house off by age 26, had payment for only 7 months when I bought my 3rd at age 42. This allowed me to invest and retire at age 51. I owned a few nice sports cars along the way (even a '62 XKE), but I always flipped them in a few years and made money.......

[Christien]

Something just occurred to me, maybe food for thought. How is it worse financial planning to borrow against home equity for anything, including toys, than it is to hold an interest-only mortgage, or rent? I remember Wayne saying a while ago it made better financial sense for his family to rent than own, and in a crazy housing market, this can seem even more sensible. I understand that an interest-only mortgage only makes sense if you can otherwise put the money that would've been spent on principal to work earning more than the interest rate on the mortgage, but I would think rent would be close to the total amount of a mortgage payment (P & I portions), which would in effect have the same net financial effect as borrowing against equity for toys, would it not?

[onewhippedpuppy]

HELOCs and IO are ALWAYS bad financial planning. Depending on the circumstance, it can be a non-issue or a backbreaker.

Renting can be good or bad, depending on the situation. Obviously renting is ideal for those that won't be in the same place for long, as selling a house can be an ordeal. In a turbulent housing market like CA, renting looks pretty good right now. However, in somewhere like Wichita, where there is no housing bubble, renting really is no bargain. For a given payment, I get twice the house buying rather than renting. Obviously I incur extra costs via upkeep, insurance and property tax, but I also am rewarded with equity and the pride of home ownership.

I think you're just comparing bad financial decisions, it's just a question of bad vs worse.

[Christien]

Ok, what about this. (ftr this is all hypothetical for me - we're in a traditional mortgage) Rent is $1000/month, mortgage is $1500/month, roughly 2:1 I to P ratio (assume early stages of mortgage). Let's say you can invest $500/month at 10%. After the first year, you'd have $5K of the mortgage P paid off , with $13K put to I, whereas with renting you'd be out $12K in rent, no equity. But if you were adding $500/month to an investment account you'd be left with $6K P in the investment at the end of the year, plus whatever I that generated throughout the year (not sure how to calculate that quickly).

So after this first year, you'd have $5K equity in the home, earning 0%, or $6K equity in an investment account, earning 10%. Plus you'd have the added benefit of no costs of home repairs, liquidity, etc.

I agree that in some markets buying definitely gets you more than renting, but not in all. When we were living in central Toronto, we looked at buying, but everything that was in our price range (up to $350K) was a *****hole - far worse than anything we could've rented for up to $1500/month, and far worse than our apt. at $900/month. If we wanted to stay in the city, renting would've made WAY more sense.

[72doug2,2S]

Originally Posted by jrdavid68

I have wanted a 356 for several years now. More than that, ..........
My wife says, “Just buy the damn car!” (she’s a keeper).

WARNING RED FLAG RED FLAG!

I think your wife might have some ulterior motive for you buying that car, like expensive jewelry, hot tub, lots of shoes, new wardrobe, perhaps all of the above? I don't know her, I just know my wife.

356 is one of the most beautiful cars I've have ever seen. I think about a little pastel or ivory one ever so often. Do you have pics?

[scottbombedout]

Life is way too short.

Buy it!