How do you buy high value used sports/supercars?

[SarlechS]

Hi Guys,

For those that buy old sports/supercars over say 50k do you tend to buy the car outright if you have the cash in the bank or do you finance against the car so you can use the saved money into another investment opportunity.

I've always used the classic approach and pay the car off in full when buying, i don't really like to have debt but I've noticed a lot of these high performance sportscars / supercars have money owing on the cars i'm HPI'ing (from reputable dealers) the seller will then clear the outstanding finance on the sale of the car so for the new buyer nothing changes, you have complete ownership of the car once the sale goes through

Am i missing a trick here? Which approach do you use and why?

Thanks in advance

[Pistonheader101]

Most people buy on finance

1) can’t be seized if speeding abroad, as car isn’t yours.

2) finance on the hook if faulty, better consumer rights if financing vs purchasing cash.

3) can use your capital elsewhere

[georgeyboy12345]

It might be the dealer financing their stock rather than owners, I think it's a common thing for dealers to do

[anonymous-user]

SarlechS said:

Hi Guys,

For those that buy old sports/supercars over say 50k do you tend to buy the car outright if you have the cash in the bank or do you finance against the car so you can use the saved money into another investment opportunity.

I've always used the classic approach and pay the car off in full when buying, i don't really like to have debt but I've noticed a lot of these high performance sportscars / supercars have money owing on the cars i'm HPI'ing (from reputable dealers) the seller will then clear the outstanding finance on the sale of the car so for the new buyer nothing changes, you have complete ownership of the car once the sale goes through

Am i missing a trick here? Which approach do you use and why?

Thanks in advance

It all depends on your circumstances. If you have disposable capital, and you can drop the whole purchase price without it denting you, go that way. If you have good income but not disposable capital, put it on tick.

There’s no right or wrong - it’s all about what works for you. It’s worth thinking about whether you want to own it in the end or will be moving it on, and if moving it on whether for another car or just to cash out. Have a plan, and a fall back, and work to it.

[MrPid]

Interesting topic - very interested as I am looking to spent between £50/£70k on a used sports car and was wondering the same.

As much as I have saved up to buy, part of me wonders whether financing half will be a sensible option.

The thought of having an empty sock drawer is also a bit scary!

[Roger Irrelevant]

MrPid said:

Interesting topic - very interested as I am looking to spent between £50/£70k on a used sports car and was wondering the same.

As much as I have saved up to buy, part of me wonders whether financing half will be a sensible option.

The thought of having an empty sock drawer is also a bit scary!

This is exactly what I'd do if spending the whole lot would leave me with nothing in reserve. Probably £10k or so on a 0% credit card, £25k on a bank loan, the rest cash. You'll have a sizeable contingency fund, you can repay a chunk of the loan/card later on if you want to, and unless something goes really badly wrong you'll always owe much less than the car's worth. Everybody's different but that seems very sensible to me.

[MDL111]

Financed one car as I did not have the cash available and paid it off after c 2 years. Rest of them bought in cash - am (reasonably or unreasonably) sometimes a little nervous about debt against a car as if something goes wrong and the insurance wriggles out (track days, not all countries covered in case of car stolen, etc) of paying out, then I have debt without an asset. nowadays also some of my cars insured third party only as the fully comp insurance is very expensive, which obviously would not be an option if financed.

[MrPid]

Roger Irrelevant said:

This is exactly what I'd do if spending the whole lot would leave me with nothing in reserve. Probably £10k or so on a 0% credit card, £25k on a bank loan, the rest cash. You'll have a sizeable contingency fund, you can repay a chunk of the loan/card later on if you want to, and unless something goes really badly wrong you'll always owe much less than the car's worth. Everybody's different but that seems very sensible to me.

Thats a good shout actually, didn't think of credit cards as well.

I'd always keep the full amount available, just in case, but like you say - other things pop up that you sometimes need cash for.

[anonymous-user]

MrPid said:

Interesting topic - very interested as I am looking to spent between £50/£70k on a used sports car and was wondering the same.

As much as I have saved up to buy, part of me wonders whether financing half will be a sensible option.

The thought of having an empty sock drawer is also a bit scary!

But if you only have £70k in your sock drawer, why spend it all on a car? Think how long that money would last paying the finance payments for example, and in that time, i assume this being income generated, you would add more to that pot anyway...

All along having that comfort blanket without having to sell assets quickly.

[paddy1970]

Financial freedom is priceless. You can do what you want and when you want it. Don't have to answer to anybody...

[SarlechS]

paddy1970 said:

Financial freedom is priceless. You can do what you want and when you want it. Don't have to answer to anybody...

completely agree but i think there's a lot of people that use the good debt vs bad debt argument. if you can borrow 50k against a 80k car and pay 1% interest but get an investment opportunity that gives you 7-8% over the course of 2-3 years you've made yourself a pretty penny and had the fun of driving the car you want..

I do think the peace of mind knowing you own the car outright is worth the sacrifice though

[MrPid]

SarlechS said:

I do think the peace of mind knowing you own the car outright is worth the sacrifice though

True - I've always also had the opinion that owning the car outright makes you take better care of it, and if any expensive maintenance crops up you have the funds available to pay for it without squeezing in finance payments as well.

I totally agree with the investment side of finance though. Not sure there are many good 1% deals available these days though, but definitely something to consider.