Financing an NSX

[flaminio]

I'm planning on buying a new NSX in the next few months or so. I have enough money to buy it outright in cash (thank you Wall Street), but I'm wondering if it's not a better course to finance it anyway. I'm not a billionaire or anything, but I'm doing OK. Some of the options I am considering:

1) Lease. Not too much up front, not to extreme monthly payments, big back-end payment (which I can then either pay cash or finance in some other way).

2) Standard loan -- 60 months or so. Probably a higher down payment than a lease, and higher monthlies, and for a longer time period, but no back end payment.

3) Home equity loan -- 10 years, perhaps -- tax-deductible interest.

4) Just write the dang check.

I realize this is not really an NSX-specific question, but since many of you reading this have gone through the process, I'd be interested in hearing your thoughts and opinions.

-Bob

 

[lemansnsx]

Since you mention Wall Street one of the things that you should consider is the opportunity cost. If you have investments that are doing well perhaps you should keep that money where it is working hardest for you.

 

[G-man]

Ok Bob, here is the Cost-Benefit Analysis for you. This is really easy for me, sine I just did all this and bought (actually leased) a new Y2K NSX.

The answer really depends on what in the world you want to do with the car after you are done with the term of whatever you are paying. For example, I am planning to keep my very rare 2000 Yellow/Black car forever. With that in mind and knowing that my money is returning me over 24% in my standard funds (Thank you NYSE) and in some cases over 300% in my tech funds (Thank you insane .COMs out there), I figured who cares what the car costs. The cost of taking $90K out now to buy a car while the market is hot like this is roughly $500K over the next 6 years. The cost of the cost of a modest lease about $144K over the life of the payments, even if you release at the end. It doesn't take a rocket scientist to figure out where you are better off.

It is also a well known fact that you only buy things that go UP in value and you lease everything else. I think we all know that there aren't many cars out there, and certainly not many NSXs that go UP in value.

So, I made the best deal I could. Paid about $81K. Then I leased it for 4 years with only 5K miles per year. Since I am buying out at the end, it really doesn't matter, I will never pay the mileage penalty. I paid $4,667 at lease inception on my AMEX Platinum in order to get the air miles. Then I paid $2,779 in VA sales tax. Yikes! After that, my payments are only $949 per month! So, in the end, my new NSX cost me less than my 1998 BMW 740I that I lease for business.

As far as the home equite loan, you might want to take the tax write-off at 10% and put some of that money into the market. I am not a billionare either... yet, but if you can make 24% return on 10% money, you gotta admit that beats letting whatever equite you have in your house just sit there.

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Gordon G. Miller, III
Y2K NSX #51
[email protected]