| 7sins |
4 July 2025 06:11 PM |
Quote:
Originally Posted by Tricolore66
(Post 13669259)
How do you go out to the garage and look at the “toy” car you need to make 144 payments on before it’s yours and not want to throw up?
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You don’t actually hold the loan for 144 months, I sell mine and or rotate in a new vehicle every year or two - zero prepayment penalty. The theory is simple, I would rather have my capital working for me in the markets than the cash tied up in the car. If I have smaller monthly payments, I have more capital to work to make money above the interest expense. Not only that, I’m buying limited and special edition cars that are appreciating in value so I’m winning both ways. This is incredibly effective on $250k+ cars. If it is a car I plan to hold forever, like my Diablo in the collection, I will use a portfolio loan against a part of my assets (stocks, bonds etc) that are used as collateral then let those assets keep working. I never see a reason to tie cash up in a car or home for that matter when it can be making more money for me.
IE my portfolio lending costs I believe are 5%, I can make that easily in tax free munis and thus the cost of capital is zero and I usually can make a bit above that. I title in MT no sales tax. Thus I’m buying these cars at zero cost to me and then profit when I go to sell them.
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