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I like to keep things simple.
Decide on a budget for an R8 (at least $100K-150K)
Determine the time frame your willing to wait (Not 3 weeks, obviously)
Save Money (for a few years)

Pay Cash! and enjoy the fact that you don't have a monthly payment :cool::eek:
 

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I like to keep things simple.
Decide on a budget for an R8 (at least $100K-150K)
Determine the time frame your willing to wait (Not 3 weeks, obviously)
Save Money (for a few years)

Pay Cash! and enjoy the fact that you don't have a monthly payment :cool::eek:
I literally hate when people say this......
 

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I literally hate when people say this......
Will never understand why that bothers some people? I pay cash for everything and have zero debt, I even pay my credit cards before statement date so they don't report a balance. Not sure where it come from but i have a strong aversion to any debt. Find it funny when people say i'm dumb for being like this, I retired at 48 and buy 1/4 million dollars in cash,

246994
 

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There are right and wrong times to use leverage.

I will tend to cap it at $100K for cars because that’s when underwriting will impose a higher rate. So write the check for the difference if you can.

Your best option is to get the best rate you can on your own. Then call the dealers finance manager and ask him if he can beat it by half a point. If so write the note with them. They will push to do it.

I am in and out of cars all the time. My dealers already know how it works with me. So they just ask me to send them how many points at what dollar I need to go with them.

For the guys that boast about paying cash, that’s not what he asked.

I could buy my audi dealership with cash and wouldn’t feel it. But, I would still use leverage for it.

Bought my heavy jet with cash. Now that was a mistake.
 

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There are right and wrong times to use leverage.

I will tend to cap it at $100K for cars because that’s when underwriting will impose a higher rate. So write the check for the difference if you can.

Your best option is to get the best rate you can on your own. Then call the dealers finance manager and ask him if he can beat it by half a point. If so write the note with them. They will push to do it.

I am in and out of cars all the time. My dealers already know how it works with me. So they just ask me to send them how many points at what dollar I need to go with them.

For the guys that boast about paying cash, that’s not what he asked.

I could buy my audi dealership with cash and wouldn’t feel it. But, I would still use leverage for it.

Bought my heavy jet with cash. Now that was a mistake.
I was not replying to the OP, nothing wrong with financing. I was replying to this about paying cash "I literally hate when people say this...... ". People are free to chose either way and there is no right or wrong
 

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Hey, there’s nothing wrong with Dentists!
 

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I guess I don't understand why you would finance a car that's going to depreciate, then pay someone to take it off your hands because you owe more for it in a couple of years than the vehicle is actually worth.

Even if you swap cars regularly your just pushing the amount your upside down into the new payment and eventually that loss has to be paid.

I had an RV Dealership as a client and heard a lot of stories about people buying RV's then when then tried to sell them they were only worth a 3rd or less of the original sticker in just a couple of years.
 

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I think there are good and bad times to finance. Each circumstance will be different.

In general, you use other people's money (OPM) when doing so allows you to put your own resources to use for better returns than what the loan would otherwise cost. For example, the bank is willing to loan you $100k at 2% for 5 years, and you can safely (being a critical term here) generate 3.5% on that same $100k over a 5 year period. In this case, you're ahead 1.5% by keeping your money invested and using the bank's for the purchase. Where this too often goes awry is that people miscalculate what "safe" returns they can generate. For example, putting the money in an S&P ETF and hoping for the 30 year annual return of 7% - 10% may or may not pan out. Over the last 10 years? Yeah, you would have made out. 5 years beginning 2007? Not so much. What will the next 5 years hold for us? Anyone's guess at the moment.

As I was suggesting earlier, we're in a very low interest environment given that the fed funds rate is between 1.50 and 1.75. So, let's say you have a portfolio with $250k allocated into a total bond market ETF, maybe with a little in a money market cushion, as your non-equity allocation portion of the portfolio. Well, that $250k is likely only producing around 1.6% - 2% these days. If your best loan offer was $100k at 4% (very average in this environment), well, it might provide 2% - 2.5% of upside for you to just use funds from your non-equity / bond investments instead. The downside, of course, is that now you're over-allocated to equities and may feel the need to rebalance. But let's say you feel confident you can replace the funds in 2 years, then maybe the risk is more contained. Another risk - if the market crashed, or just pulled back substantially, you'd have less ammunition to buy.

It's really quite personal, though. Everyone's situation will be different. In times of booming equities and moderate (to certainly high) inflation, holding cash or cash equivalents is just silly. But, if you expect a recession is near, or just a considerable pull back, "cash is king" as they say. In that case, I'd much prefer to have OPM funding my car at a low, locked-in rate, keeping my cash (or non-equity investment equivalents) ready for deployment.

Everyone needs to judge this for themselves. A lot of it will be down to personal finances and how/where/why you're invested, your goals, terms, etc, but then also your personal outlook on the broader market.

All of that said, there's ONE case in which I couldn't ever recommend someone use financing for a supercar, exotic, or other "toy" - and that's if financing is your only choice, and you don't have the cash or investments elsewhere to cover it. That's simply because these things ARE just toys - in this case, it would mean you're actually just going into debt to own it, versus using the financing as leverage but still profiting (net) elsewhere. These cars are wonderful, but not "cripple your finances to own it" wonderful.
 

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There are right and wrong times to use leverage.

I will tend to cap it at $100K for cars because that’s when underwriting will impose a higher rate. So write the check for the difference if you can.

Your best option is to get the best rate you can on your own. Then call the dealers finance manager and ask him if he can beat it by half a point. If so write the note with them. They will push to do it.

I am in and out of cars all the time. My dealers already know how it works with me. So they just ask me to send them how many points at what dollar I need to go with them.

For the guys that boast about paying cash, that’s not what he asked.

I could buy my audi dealership with cash and wouldn’t feel it. But, I would still use leverage for it.

Bought my heavy jet with cash. Now that was a mistake.
This.

I prefer to use OPM for toys. I’ll keep my powder dry for actual investments.
 

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Once I learned the power of compounding interest it motivated me to save more, and invest. I remember sitting on the couch checking investments thinking "why do I have $120k in potential investable money sitting in 2 cars in the garage that I own outright, that are depreciating daily". That $120k I invested into the S&P in 2009 is worth way more than the 3% car loan expense on a depreciating asset. That I traded in 4 years ago.

Ever since then I set my car loans to the projected monthly depreciation, so its almost like I'm leasing to myself. I use OPM to finance while my money is growing and compounding. I'm in and out of cars alot, so 3% interest rate doesnt phase me since I'm allowing my cash work compounding in investments over the long haul. Cars depreciate no matter what. My wife's Q7 loan is set to $600 per month, which is the depreciation. I put 20k down. When I go switch to a new car I spent my $600 per month, take the 20k, and roll into a similar car around $600 per month. If I own it outright or have a loan, the monthly expense is $600 per month for her car whether I pay upfront or through a loan.

My R8 is a $10k / year expense. Probably 1k of that is loan interest, but the trade off is I will make 10x that amount in the market plus have the flexibility to keep my cash on hand. I just set aside 10k annual towards the R8 all expenses included - it's a no brainer. The ROI for me is through the roof.

Now, I will never take out a loan if I cannot write a check for the principal without any issues. In other words I could easily pay cash but choose not to.

I actually took it a step further this time. I bought an online biz that covers my annual 10k R8 expense. So instead of putting a large chunk of cash down I used it to run / grow a website that will make me income over the long term. Sure there's risk, but that's a whole different threat all together.
 

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What bank was that through and how many months?
A local bank I run a pretty decent amount of stuff through including construction loans for commercial development projects. That was a 72mo rate. If I went 48mo I likely could have seen sub 3.

As always your financial situation is unique to YOU and it may be better or worse than mine.
 
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