Car loans

Sephiroth · 11-04-2002, 11:16 AM

How many of you have an older 911 like the SC or the 3.2 and bought it with a car loan vs. cash? I'm still debating on going with a 911 or a 944. A decent 911 in the dfw area goes for about 15000 and I was thinking of saving up 3000 or so first, getting a loan for the car with no down payment, keeping the 3grand for if anything is wrong with it. What does everyone think? Also, for those of you who got a loan, how much does full coverage run for you?

Thanks

VincentVega · 11-04-2002, 11:28 AM

Having a 3k reserve is a good idea, sure beats depending on Visa to bail you out. Insurance always varies, I think mine is ~$50/month with full coverage. I'm 27 and it's my 2nd car.

Other point with a loan is since rates are pretty low, do you have something better to do with your $$. Having 15k tied up in a when with stock prices, arguably, low is a tough call.

s_wilwerding · s_wilwerding's Garage

I've never been a big fan of taking out car loans, especially on older cars. There's just such a "really, really don't need it" aspect to buying a 20 year-old Porsche that makes taking out a loan to buy it seem a little silly.

Save your money for awhile, then pay cash. Heck, I'm a 23 year-old graduate student and I managed to save up $12,000 to buy my car (and it's a second car at that). If I can do it, anybody can.

Dignan · 11-04-2002, 12:14 PM

I bought mine with a loan, and the intrest sucks... I have a Subaru Loyale as well. I pay an annual insurance paymant of $2200.00 for both cars.... so don't get any speeding tickets like i did before .. HAHAHAH

Eric

MarkY · MarkY's Garage

For a loan for an older car go to www.peoplefirst.com

Great rates, great service.

GeorgeM · GeorgeM's Garage

I bought mine with a used car loan at 8.25% back in '98. Then I got a home equity loan to build a deck and screened-in porch and the loan officer suggested I fold the car loan into it as well. So now I have the title, get to write off the interest and the one payment is $200 less per month than the car loan and equity loan would have been as separate loans.

BlueSkyJaunte · 11-04-2002, 01:19 PM

My policy has always been, "if it doesn't have a factory warranty, don't take out a loan on it."

Except the house, but we've got a home warranty service for that (already taken THAT company for a ride!).

Just my $.02.

JonT · 11-04-2002, 01:25 PM

If you can carry the loan payments--don't worry about getting a loan. Insurance on the other hand is highly dependent on age and driving record. If you are under 25 watch out. Keep the 3 g on hand for emergencies--the urge to spend on that on upgrades may be insurmountable.

FLAT6FAN · 11-04-2002, 01:39 PM

What about a credit union? I know that they have good rates for new cars.

Sephiroth · 11-04-2002, 01:44 PM

Thanks for all the advice. I think I will probably go with a 944 for now for my first porsche. 4-5 grand isn't bad, I'll have enough money left over for a good paint job and maybe some interior work. It will also give me a good idea of porsche upkeep and pricing. I can also start saving up for the 911 this way and pay it all in cash.

Thanks.

Dantilla · 11-04-2002, 03:27 PM

Way to go.

I refuse to make interest payments on anything that won't make me money. Borrow money to buy real estate. Pay cash for cars.

bell · bell's Garage

Quote:

Originally posted by FLAT6FAN
What about a credit union? I know that they have good rates for new cars.

i took a 4 year loan out for my carrera with my credit union and got a less than 5% intrest rate. insurance is around 240/6 months full coverage (second car)

campbellcj · 06:36 PM

In general I agree with paying cash if you can swing it. The banks keep the interest rates on car loans up fairly high, so the money is "expensive" (unlike major business financing or home mortgages, which are pretty cheap lately.)

I financed my first Porsche thru my credit union, less than a year after graduating from college. (This was...ahem...a while ago). I had no other debts at the time, no cash/assets but a good job, and the ~$225/mo payment was no sweat. Nowadays I try to pay cash for as much stuff as possible, including cars. Being in debt sucks. Got the killer mortgage and the wife's killer student loans already - no need to make it worse.

Dignan · 11-04-2002, 03:56 PM

Bell,
What insurance company are you with ? That sounds like a GREAT rate. $24.00 every 6 months. I need that rate.. please share!!!! How old are you and do you have a ticket or two?

Eric

carnut169 · carnut169's Garage

Its $240 I think. Insurance also depends on where you live- I have a mostly clean driving record, married, home owner and pay $1000 a year for full coverage 100/300/100 (I think the car is worth full coverage even without a loan note).

Tinker · 11-04-2002, 06:00 PM

I have to agree with some prior posts.

Never finance a depreciating asset.

Pay cash or live without it.

Tinker

wdarner · wdarner's Garage

"Never finance a depreciating asset."

What? huh?

Most purchases that are made involve depreciating assets.

My '87 Cabriolet is not among them, but my '01 Boxster is.

The value you personally assign to the pleasure of driving said asset needs to be included in the equation.

Pleasure has value. And financing such is OK. HEY, we could all be dead next year!

If such were not so people would never purchase vacations via credit cards and pay them off "over time".

YMMV

RANDY P · RANDY P's Garage

I agree. I'll never own a "new" car again, let alone finance one. Banks can be downright evil sometimes can't they?

Never finance a depreciating asset. The payment remains after the newness wears off.

Seen lots of people ruined by not understanding these simple truths while living in excess.

rjp

Epster77 · Epster77's Garage

I disagree with not taking out a loan on a vehicle, especially an older 911. Everyone knows with proper care and maintenance, you can resell for at least what you paid. Unless, you did not do your PPI and got stuck with a money pit. My brother-in-law sold his 911 Cab for $3000 more than he paid after 2 years of ownership. 2nd Mortgage or equity loans are the best choice for the interest right off.
My cost of maintaining my 87 Cab has been extremely low. Not sure how much money will need to be spent on <5k 944.
I do agree with insuring the vehicle with full coverage even if you have the title.
Just my .02

BradH · 11-05-2002, 07:58 AM

For me, it comes down to liquidity vs. liability. I prefer to be more liquid and pay the nominal (<6%) cost for that liquidity. Plus you can shop rates and refinance a car loan as often as you'd like for next to nothing ($13 title transfer in Texas.)

Personally, I think tying up large sums of money in an illiquid vehicle is foolish for someone with more modest means. Being on the younger end of the age spectrum, tying up a goodly portion of my net worth in an automobile would keep me up at night. Pay for your pleasure in small chunks and reserve your cash for viable investment opportunities.

With that said, I would only finance an older car if it was in excellent shape. Paying interest on a project and/or being upside down in value is not a good thing. Most of us don't drive particularly rare 911's, so logic dictates that the nicer cars have a much stronger chance of appreciation over the next several years. That potential appreciation can negate any interest paid. Finance a clean, sorted, solid car or pay cash as you go for a project.

By the way, www.peoplefirst.com is a super company to work with, especially for a person-to-person transaction. Highly recommended!

My $0.02.

Brad
'83 SC coupe