Using a heloc js not the same as taking a car loan
I was going to ask the same but stopped short knowing how much gated cars will be dropping in price with several new companies doing conversions for $10k
I lost $40k in depreciation, spent $12k in service, $4500 for 3 years worth of insurance then property and sales tax was over $20k so what's that all in, $76,500 for my 3 years of ownership (but taxes in Cali are more than FL)
Absolutely silliest thing I've ever heard with rates today... Sent from my SM-F916U using FerrariChat.com mobile app
Lots of replies here, so here are some general answers I posted all about my car on another thread on this same forum and included a pic Super nice all original one owner red/beige spyder, F1, 6,400 miles The price was about $140k, but tax, tag, title, etc it totaled $150k I could have gotten a cheaper car but it would have more miles, different color, or involve transportation costs to get it and this one was good for me Ferrari prices are spiking and I did not want to want another year....blah....blah...blah I could have bought a gated 360 for $120k or non-gated for under $100k I also looked at 458 and even 488, but did not want to pay $200k++ I am changing the tires and doing a service call and some things like battery, etc - will pay $2k cash for that (or credit card) If I get into an accident - I have full insurance on the car (little less than $2k per year) and could be lower if I wanted to assume more risk as my original quote was $1,500 per year and I increased the value on some components that raised it to $2,000 per year. I could have paid cash for the car, but I decided to take a $150k wire transfer from my Merrill Lynch Loan Management Account (LMA account) as this is a is a flexible line of credit that can be used for almost any purpose. An LMA account is a secured line of credit that uses your eligible securities, such as stocks and bonds, as collateral (ie I did not have to sell any assets). There are no fees to establish, no minimum balance nor annual fee, so you can access funds as you need to. You can access funds, generally within one day of approval. Of course, if and when I sell it, I may have to bring money to the table to close my loan, or I can simply throw $10k at the loan each year. Hopefully I will be close to break even, but if I lose $50k, then that is the cost to own and drive a Ferrari. Technically my payments are $302 per month, but in reality they are $0 as I am letting the interest grow the $150k debt at a $302 per month rate, thus in a year I will own $153k, etc. I am not saying this is smart or dumb strategy, I am simply stating this is the method I used to buy my Ferrari. Perhaps I can post here in a few years if I sell the car with details on how it turned out. Some people pay upfront for their toys and most of the time I do that, but in this case, I chose to pay at the end as interest rates are soooooo loooooow.
being crass, yea, I prefer to pay cash but now for the 2nd time in my life I'm seeing inflation at full force (the late 80's when Testarosas's were over $250, a few over $300k). I could be 100% wrong about Bill's decision (would not be the first time) but we all know what's after inflation... Did Bill say or did anyone ask him how long he wants to keep the car? If he's going to flip it fast he might be ok, but we all know the addiction and how cars accumulate over the years
I have owned lots of classic muscle cars, jeeps, etc but this is my first Ferrari. Honestly, I was going to pay cash, but with these interest rates so low, I figured, I would just draw from an LMA and see how that goes for a few months. Perhaps I will pay it off before then end of the year or let it go a few more months. I really don't know how long I will keep this car as I generally hold my fun cars for about 5 years or so, some more and some less. I sorta wanted a 458, but those prices are way up from last year and I figured a F430 is a good place to start with Ferraris to test the Italian water.
I actually debated not posting the bank I used as that might violate some forum rules, but I think the LMA is a trademark of that firm, so people may not know what it means. I am a semi-retired physician.....
I just read that after I posted my comment, I did delete my comment, there is always someone here trying to work an angle on others for money, financing, parts, computer chip upgrades for performance etc, thank you for clarifying your borrowing against your stock so you have the loan backed with collateral, I thought you just got a unsecured ballon note for $150k hoping to drive the car for a few years and make money, that's really hard to do unless you own a holly grail car.
I am a little bit crazy, but NOT that crazy. This is just a financial math equation. If interest rates were high like 10%, then I would never entertain this type of loan. I actually first used this when I bought some investment properties and wanted to avoid the whole appraisal and inspection of traditional bank mortgages and paid off the loans within a year or so. House flippers do this all the time. I guess a LMA is sorta like a HELOC, but my collateral is stocks, bonds, etc vs a property. I figured the true wholesale dealer cash value of the car is probably $125-130k and I paid around $140k as it was located close to my home and I did not have to travel or ship the car or pay state to state taxes. There is $10k in tax, tag, title fees that all dealers charge and not much room here. So, I am all in at $150k for a super clean car. My hope to to break even or lose less than $15k over three years, but expect to lose $30k or more. I just don't want to lose $75-150k like many first time buyers and that is why I chose this car. Also, I just like the rawness, beastmode, analog dials, simplicity, beautiful timeless design, and pre-iphone technology of the F430 and I find the glass engine bay cover in a spider super sexy. Sure it would be nice if it was gated, but I have had tons of stick cars and did not want to pay the $100k premium for that option over the F1.
We need to use the Testarossa price trends thread as an inflation indicator from now on it's like clock work, maybe summit it to CNBC
These liquidity access lines are neat products. No credit check, no financials, no fees, and in reality no monthly payment is due, ever. Unless of course the market drops 20% or so, then they'll automatically sell your securities in a blink. Life is short. Congrats and enjoy the F430 in good health! David
He said earlier in the thread it’s a lower mileage F1 430 and he was including the sales tax and registration. So that’s not out of line. Prices have been creeping up and good examples always go for a premium. Sent from my iPhone using FerrariChat.com mobile app
Yeah and if someone gets 2.4% through their LMA then they have enough assets not to waste time trying to negotiate $30k or whatever less than they paid for a car local and one owner.
2005 F430 Spider - one owner - 6,500 miles Rosso Corsa / Beige / Daytona power seats with black piping, F1, yellow tach, red calipers, Scuderia shields, black carpet, black dash, aluminum trim No sticky buttons (those were replaced by original owner for $1800 at dealer) Hi-Fi audio with subwofer, Lots of original documentation and Ferrari service records, original tires, mint condition, Tool box, flashlight, owners manuals, car cover, tire pump, battery charger. Kept in storage and paint, interior, engine in excellent condition There is 95% clutch left and no major issues according to the PPI - other than change 16 year old tires I paid around $140k + $10k tax, tag, title = $150k adding new tires + battery and changing fluids = $2k or so the car is local to me so there are no transport fees or new state fees or me flying out to see car, etc I am not sure if I could buy a nice F430 spider in rossso corsa for $30k less, but higher miles or different colors are definitely cheaper. I am assuming (or betting) this car will hold value and desirability, but won't be too disappointed to sell in a few years for a loss. I did see some real bargains reported in 2019, but that was then and prices are higher now. Also, $30k is still a lot of money to me, so I felt this car was right for me.
It may seem like "on average" a good deal, but if both the securities and car prices suddenly drop 50%, you would be wiped out vs if you sold the securities and bought the car outright, you'd only be down 50%. It may seem like a small "one off" risk, but life continues. If you later take another risk and then another, you'll eventually go bust with a probability of 1 (Taleb 2018).
$150k for an F430? (edit now seeing the later posts. Inflation is everywhere it seems) re the decision to buy it with an equity line vs cash vs whatever...who cares? (that is a personal finance question that varies by, umm, "person". And is "personal". So, whatever)