Vehicle Financing - Anyone know a lot?

[Kor]

Lets say that in theory I wanted to buy a very expensive car. *cough*porsche*cough*

What are my options for financing? Whats the best option?

I'm thinking a home equity loan would be the best option? I read somewhere that you can deduct part of the interest from such a loan from your taxes, and that you can get rates that are quite low (~5%).

I think Porsche offers rates of around 10% which seems much worse.

What about buying a US car? I am guessing that complicates things?

[Canadian Turbo]

Re: Vehicle Financing - Anyone know a lot?

Well if you get a Home Equity Line of Credit then you can spend the money on whatever you want. The interest rate is generally at bank prime, currently 6%, which could be less than a Porsche rate and you could buy a used car or one from the US. I just got a HELOC last week so I am fairly fresh on the info.

Interest is generally not deductible on taxes unless you are using it for business purposes so I dont think that would give you any benefit. But going this way you may end up paying a lot more interest in the long run as you could keep the loan longer then a typical car loan period.

I am not sure what Porsche offers for lease and or financing but I would suggest looking into it just to make sure you are not missing out on any better deals.

[R_Ethug]

Re: Vehicle Financing - Anyone know a lot?

yea kris.. home equity.. i paid my car off doing that already.. then sell my condo in 2 months still have money for new house done deal

[Kor]

Re: Vehicle Financing - Anyone know a lot?

Well I should have mentioned I would likely be buying a used car.

I might also look into buying some kind of certified used car warranty from Porsche Canada if they'd let me do that on a US purchased car.

HELOC seems like a nice option, do you think that any other credit union or bank personal loans are going to compare?

Does this kind of thing apply in the US only then?

http://www.ehow.com/how_10356_deduct-home-equity.html

Thanks for the reply Blair :P

I think getting into a 911 by the end of 2007 might happen for me...

[Billip]

Re: Vehicle Financing - Anyone know a lot?

The USA has much different laws on deducting mortgage interest. For example, you can do it there but you can't here.

I also just got a HELOC last week (seems to be the season), and another thing you can do if you have a HELOC is to lock in a certain portion of it for a term of your choosing. For example, if the rate on your HELOC is prime (which is pretty standard), you may be able to lock in $x amount at a rate which is less, maybe 5.5%. Of course then you have to pay principle and interest, but that's probably a good idea anyways. The same rules as a mortgage apply when you do this though, such as locked in interest rate, penalties for prepayment (within the rules of the bank of course, some allow 15% extra payment per year or whatever), etc.

I contemplated doing this when I got my A3, but I got a better rate through Audi Finance.

[Canadian Turbo]

Re: Vehicle Financing - Anyone know a lot?

This is another reason why you need to be a contractor Kris, then you could right off a portion of this interest.

Interest in Canada can only be written of against income it is used to generate.

[Kor]

Re: Vehicle Financing - Anyone know a lot?

Bill, thanks, that really helps, being able to lock a portion with a more fixed term and payment schedule would be fine with me for financing a car (I would be making regular payments anyway).

I wonder if Porsche financing would be competitive, but I bet that if I went to a US dealership, they won't finance a non-citizen. I wonder if I could get porsche canada to somehow arrange to bring up a car for me. Used porsches are too much money up here.

As for being a contractor, I'm not sure it makes as much sense anymore for various reasons that are best left off of the forum. But I will keep it in mind and maybe get back to that later.

[Chris]

Re: Vehicle Financing - Anyone know a lot?

Kris - let me know when you plan on getting it. I might just join you and we could maybe work out a great deal from a US dealer if we take two cars off of their lot....

In regards to the extended warranty on a US car... I can't see it happening. Canadian dealers are already making life miserable for Canadians with US cars so I think it would be highly unlikely to get them to offer (or honor) any type of extended warranty. But you never know, if the car is old enough (say, pre-2003) they might not care.

Are you still thinking 996? I'm beginning to sway that way, too. I love the 993's but for the one I want (C4s or turbo) they are often more expensive than a low mileage 996.

We should grab a pint sometime soon and discuss.

[Kor]

Re: Vehicle Financing - Anyone know a lot?

I dunno, warranties are good money for used car dealerships. You pay them cash for a service they can later refuse to give you ("not covered by your warranty, sorry"). For all the risk of a failure that warranty would have to cover, there is also the very good chance that I won't make any claims over the life of the warranty and they get free money. On a 996 the car will be pretty new with very low kms... if a dealership does a full inspection, why wouldn't they want to sell me a warranty?

Yeah, Chris, definitely. I'm pretty serious. But I am thinking it would take some time to find the right car and investigate all these options (potentially months).

[Chris]

Re: Vehicle Financing - Anyone know a lot?

Good point, Kris. Might be worthwhile afterall to get the warranty.

You should register on the rennlist forum board - it's a good resource for all things Porsche as well as finding quality cars for sale.

[Billip]

Re: Vehicle Financing - Anyone know a lot?

I think your chances of getting any financing/leasing arranged through a US company are nill. Remember: you are a nobody in the US. They have no access to our credit reporting agencies, and you have no history there.

But if you had a HELOC it would be dead simple. Just write them a cheque.

[100%VAGitarian]

Re: Vehicle Financing - Anyone know a lot?

i have a friend who has brought quite a few cars, including 911's, up from the states. i'm not sure i can help you, but i'll gladly forward his # to you. i'm sure he could answer lots more of your questions.

[Chris]

Re: Vehicle Financing - Anyone know a lot?

I'm a US Citizen... does that help me at all?

[Canadian Turbo]

Re: Vehicle Financing - Anyone know a lot?

You need to have credit history in the US, in order to qualify for a loan there. However if you are taking it out of the country I doubt you would get any financing no matter what your credit was like.

[Khyron]

Re: Vehicle Financing - Anyone know a lot?

What's the monthly insurance cost for a <40 year old single male with a 911 anyway?

Khyron