Financing Luxury Cars

[H4ck]

Does it ever make any type of sense to finance luxury vehicles?

In my mind, I have always bought cheap used cars in cash. I still drive my old infiniti with leather interior and superb reliability that I bought for 1500 bucks.

Do I have the money to buy a mercedes benz? of course......but why would i pay 30-40x more for a car that has a different badge, and has leather interior like my car that only cost me $1500 bucks.

I never understood who in their right mind would finance a car......especially since it is a depreciating asset.

I have seen it all too often, people who finance a luxury car yet they live in some type of apartment or condo. Then you got the person who drives the oldest toyota minivan on earth with duct tape on the windshield and takes you to their 10 million dollar mansion up in the hills.

[Gladiator]

You drive what you like. It may depreciate, but if you want a new car and like it...who cares? Not everyone looks at it as investment.

[aspkin]

I bought a pretty expensive car within the last 6 months. Much more than you might think, do I regret it? Yes and no. Life is too short to not drive what you like. Have fun. Before you know it it's all over.

[H4ck]

Would rather rent many luxury cars for a few hours for a few grand..........taste the rainbow.....

[rsot]

Originally Posted by jarsky541

Would rather rent many luxury cars for a few hours for a few grand..........taste the rainbow.....

That is actually a decent way of just enjoying the moment - rather than deal with cost of insurance, gas, etc to keep the car in house

[GreenBean]

Originally Posted by jarsky541

Would rather rent many luxury cars for a few hours for a few grand..........taste the rainbow.....

rsot is smoking the Rainbow.

He seems unable to calculate a luxury car hired for several hours of fun would still incur expenses of insurance amd gasoline usuage.

Unless, of course, rsot thinks you are just going to go sit in a showroom and not drive the wheels.

Maybe rsot thinks that would be the pot of gold at the end of the rainbow?

[yankee]

I buy a lot of trucks. I would never pay cash. Currently I have two recreational vehicle loans at 0% interest and three auto loans. One at 0%, another at .09%, 2.9% and the latest one at 3.9% because of timing on my credit report.

Paying cash compared to the little interest is insane to me but I would NEVER buy a car for 30K, never mind $1500 and my investments/business yield magnitudes more than stated interests rates.

[sax4]

Do I have the money to buy a mercedes benz? of course

Why of course? Apparently 57% of Americans have less than $1000 in their bank accounts

[rsot]

Originally Posted by GreenBean

rsot is smoking the Rainbow.

He seems unable to calculate a luxury car hired for several hours of fun would still incur expenses of insurance amd gasoline usuage.

Unless, of course, rsot thinks you are just going to go sit in a showroom and not drive the wheels.

Maybe rsot thinks that would be the pot of gold at the end of the rainbow?

I have done the renting for several hours - credit card insurance and good credit reduces cost - gasoline depends on what you do with it.

Another idea is renting it at a service that has a racetrack if you want to test drive highend luxury sports cars.

[LuckyGuy99]

I think that super expensive cars like Lamborghini and Ferrari are not worth to buy if you can't afford their yearly service fees easily. It's better to rent a Lamborghini Huracan for a week and enjoy it, than to buy and spend tons of money for it's service. Other cars like Jaguar F-Type, Panamera, Chevy Camaro- absolutely worth it to buy.

But damn..Huracan is so beautiful 😎

[H4ck]

I never finance cars because well I heard stories of people that missed the payment by 1 day. They then realized their car was repo'ed. Basically I don't like any type of burden such as car payments weighing me down.

[JamesNorth101]

The biggest issue in my experience comes when you try to sell them

You have to keep up the payments while the car is sat in a showroom being sold leaving you paying for everything while still not having a car

Unless you get a car that has already lost a large % of its value you will end up seriously out of pocket as well in terms of depreciation

[GreenBean]

Originally Posted by JamesNorth101

The biggest issue in my experience comes when you try to sell them

You have to keep up the payments while the car is sat in a showroom being sold leaving you paying for everything while still not having a car

Unless you get a car that has already lost a large % of its value you will end up seriously out of pocket as well in terms of depreciation

So true. Set of wheels drop in depreciation as you drive them out of the showroom too.

[JamesNorth101]

Yes they do

Never bought a new car because of it

I tend to be pretty careful in my research before I buy a new car and I try to stick to around 30 to 40k in terms of miles and then age really depends on the type of the car and what its current % of value is compared to the original purchase price.

The most recent car I got (March last year) was 40,000 miles and 9 years old, but it only just hit 50% of its original value which means now its keeping its value very well in comparison to other cars that I could have bought for the same price. Now I am looking to sell it its only lost about 10% of its value that I purchased it at even though I have put 22,000 miles on it

[yankee]

Originally Posted by jarsky541

I never finance cars because well I heard stories of people that missed the payment by 1 day. They then realized their car was repo'ed. Basically I don't like any type of burden such as car payments weighing me down.

That would be at least 45 days late without any communication with the creditor by USA federal law... Heck, you have 10 day grace period by law as well.

If you herd a story of 1 day late repo, it was just that, a story.

[yankee]

In the USA, certain new vehicles are ok as far as depreciation goes and non of them are american made...Well Jeep wrangler I guess. Toyota, Honda, Lexus, Jeep/wrangler, and a couple others a used one with 30-40K miles a few years old is within 10% of a brand new one with no miles. The big difference is the interest rate. New, if you buy at the right time is 0%-2% compared to 4-10%

Leasing right now high end cars is a bargain. Cost of driving is about 1/3rd but they cap miles per year at 12-15K

[JamesNorth101]

Originally Posted by yankee

That would be at least 45 days late without any communication with the creditor by USA federal law... Heck, you have 10 day grace period by law as well.

If you herd a story of 1 day late repo, it was just that, a story.

I was going to ask about that....

Seems very very harsh otherwise!

Banks are more interested in getting their money than the property back. If they take the car back chances are they wont recover their full funds so they would much rather you paid.

[phaz0rz]

Originally Posted by yankee

Cost of driving is about 1/3rd but they cap miles per year at 12-15K

That's always been the hangup for me lol. Why am I going to lease a $60k BMW if I can't drive across the country immediately?

I pretty much agree with your philosphy, OP. I'd never even considered using credit/leverage until yankee pointed out the benefits for me.

I would probably be comfortable using credit for something business related which will generate income, but I wouldn't want to finance anything purely for myself.

[GreenBean]

We keep the work vehicles no longer than 60 months.

Some we lose to accidents during the work shift. We take the vehicle off the road if it has AU$25000in major accidents. Not going to spend more on maintenance.

All going well this year, we will get a new fleet. We have a chance of 0% for finance or even 2.3%. Not decided yet. The “boys” are begging for what we call Double Cab utes. And we need diesel. Will be fun. My BeeMer is tired now. Too many empty coffee cups.

[JamesNorth101]

You can in the UK get some really cool finance deals. I'm not sure if you have the same thing in the US though

I have always bought cars for cash and never financed, but I have looked into it a lot and then one that tempted me the most was a really interested package

It worked like this

Find a car you like (lets say its worth £100,000 to make the math simple)
You go to companies that offer this type of financing
You tell them you want to do X miles per year yada yada
They then sit down and work out 'If so and so does so many miles per year what will the car devalue by'
They then come back to you and say that they think your car will devalue by £20,000 over 2 years so long as you keep the car in good condition and stick to the agreed millage.

Then then buy the car themselves and hire you the car. In return you pay them £20,000 over the course of 2 years + 10%. That way you get a £100,000 car but you only actually have the monthly repayments of a £20,000 car

If you do this very carefully you can get some amazing cars for a lot less in terms of monthly repayments. The downside is you never actually own the car.

[phaz0rz]

@GB - You really should consider drive-testing your employees or upgrading your insurance plan.

[phaz0rz]

@James - do you own the car when it's over? Program you mentioned sounds similar to a lease in USA.

EDIT: nevermind, I see that part of your post now. That's the same thing as leasing over here. I don't think most Americans would consider that "financing a vehicle" since you never own the car.