I plan on leasing and after 3 years if I'm still in love which I presume I will be I'll purchase the upgraded model and keep it forever, at least 60% of the payment will be tax deductible for me. I have no intention on buying out the gate due to depreciation.
I plan on leasing and after 3 years if I'm still in love which I presume I will be I'll purchase the upgraded model and keep it forever, at least 60% of the payment will be tax deductible for me. I have no intention on buying out the gate due to depreciation.
I do also agree that there will be some pretty significant depreciation, especially once a lot of the other manufacturers start to produce sports cars with electric motors. But I think the car will keep its value in the first year or two prior to that occurring (especially due to its low volumes of production).
That said, I'd still be hard-pressed to sink over $75,000 into the car over three years (assuming 5k down and 2/mo) and have nothing to show for it at the end...
I plan on leasing and after 3 years if I'm still in love which I presume I will be I'll purchase the upgraded model and keep it forever, at least 60% of the payment will be tax deductible for me. I have no intention on buying out the gate due to depreciation.
I'm assuming you own a business? In any case, how are you able to deduct 60% of the payment? I own a company and have been told by both my controller and accountant, that there really isn't any way for me to write off an exotic car. I think the IRS would have a difficult time believing that someone is actually using this type of car for conducting business...
Hehehe, that reminds me of a story my dad used to tell. He was a surgeon and apparently one of the cardiac surgeons had two Ferraris, both business cars, under the reasoning that he absolutely needed to be able to get to the OR when things went down. Who knows what the IRS would think in an audit but I suspect some people just let their lawyers deal with that when it happens.
In the uk i think there will be a significant premium on these cars for a long while. I suppose the difference is no dealer can sell for more than list and until supply exceeds demand it will be a seller's market.
If I buy (not decided - will depend on the final reviews/options list, etc) it will be cash. I'll be living in Japan, which will have a fairly similar list price to America. Bear in mind that I come from Australia, where car prices are 50-300% more than most of the world. I will get close to the purchase price of an NSX in Japan just for selling my 2010 R8 4.2 in Australia...
I never buy toys unless I can afford to buy with cash. However, with last few Being increasingly more pricey, I have borrowed anyway even though I had the funds needed available in my liquid investments. However with rates as low as they have been I've either refinanced the mortgage and borrowed the excess needed or used an equity loan. Since ordering time is approaching -FINALLY- I'm in process of viewing options and a equity line of credit at my credit union looks good. If I go that way, it is zero cost in other than title ins ~$300 ( for an 150k loan) with my CU looks acceptable. It has intr of 2.5% 1'st year then goes to prime ( which recently went up to 3.5). Overall (over time) the investment acct. has done better than the loan interest so justifyable. I draw out from investments to make the monthly payments. And come tax time can write off the loan interest... Which in reality helps offset interest and capital gains on the invested monies. If loan rate ever gets too high I can just liquidate some investments and pay it off. Been doing this for many years now with no regrets.
Gadgetman, your strategy works as long as nothing major hits the fan. But you're definitely adding a lot of risk that you are not accounting for. You are putting your home at risk in order to buy a quickly depreciating asset. It's worked for you in the past, but say the market tanks 40%, then you're selling investments at low prices to make car payments for a car that is upside down on the loan (you will be missing out on any market recovery because you pulled the money out, and the NSX isn't going to go up in value like the market can). Or you lose your job, now you're drawing on investments to pay for the car payments and all your other expenses so you don't lose the house, etc. Your strategy works fine, especially since you have the funds in investments, but you're forgetting that you are putting your home at risk for a car.
AGREED
You are absolutely right on risks. I/We all saw that in '07 drops.
But the drops are "typically" not long term so only impacts the time it happens.
So with that in mind, I'd probably just ride it out and only take out monthly payment $'s.
If the loan spans 10 +/- years, the averaging out of good and bad market "should" be OK... but noting is guaranteed.
Can't lose the job as before, since I've been retired since 6/13 (after 40 yrs with them).
The NSX is to be my post retirement (and ultimate) present to self. My '09 GT-R was my pre early retirement present to self. (Interesting enough that many call me by my initials GT . One day a few weeks after delivery, after washing and then looking at the car the light went on as I looked at the model/Logo... "GT-R"(etired) . Maybe it was meant to be?)
Anyway, monies today are pension, S/S (started that at 62 as most should do if not working) and then tapping investment monies as needed.
Fortunately Have yet to tape IRA.
I also have 7 acres of land on the market so if/when that goes , it will go against the principle.
And I have some stagnant stocks which may be done growing so I might unload some of them.
Regardless... A lot to figure out in near future and before end of Feb if possible.
An your points are well taken... and they need to be considered in the big picture.
Gadgetman (GT): you are definitely in a good situation, congratulations! Your fixed income alone takes out a lot of the variables that others would have to worry about. I'll just use my example so that others understand that they are increasing risk. But your situation is different and quite enviable. Enjoy that brand spanking new 2016 Acura NSX
You are absolutely right "Doc" so an Excellent Point! Too many people chose to ignore the subject or just put such thoughts on back burner too long for that some day in future review.
A very good/important form of protection most everyone needs to think of and prepare for... while young and healthy enough to secure a good premium rate. Good ones with solid background and user flexibility are getting harder to find now. I'd assume most of us don't skimp on proper insurance for our pricier Toys... so please do the same for your body and savings.
We got ours a number of years ago (Genworth via AARP). It is set up to provide most of what might be needed/month (we chose the numbers vs rate), with a lot of flexibility on how distributed/used, plus meets some special state regulations such that a reasonable amount of our savings/net worth is protected from being drained. Plus the coverage/month increase each year to address inflation (w/o a premium increase... so far). I'd suggest anyone out there in their 50's +/- should look into LTC cost vs benefits (long term) and make important decisions. As I like to say, better to have and not need than to need and not have. Again a word of caution, good programs are getting scarce or overly costly.
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