Paying Cash for your C8 Corvette?

[Denvette]

The time line from order to purchase can be years for some of us. I used that time to collect cash. My ZO6 was just delivered to the dealership and I was happy I saved as the rate is currently 6.49% for 72 months. It's a matter of budget but this is not the time to borrow for a car. Interest on a car note is not tax deductible. Of course, who in their right mind is buying a $100k sports car in the first place? Work smart and play hard!

[ChotisBill]

I paid cash for mine also. The last time I bought a car or anything else on credit was 1980 and that was my house.

[adamsocb]

One other thing to consider it the tax impact. If you are pulling the cash out of an IRA it will increase your adjusted gross income. That was my position so I financed a portion of the Z06 @5% to keep under a higher marginal tax bracket and increased Medicare premium. My income is from a mix of taxable and non-taxable sources so paying the 5% over time is less than the taxes on the IRA distribution.

Oh, the 1st world problems of being old and retired

[C8Zeb06]

Paying Cash for most of it and the rest at 5.64% for 72 months. Easy Peasy.

[23RedMist]

60-80k in my area can net me 2-3 multi-unit properties with positive cash flow. I did a mix and paid a significant amount down but financed the remainder and used that to buy a property that covers my rate plus some of my payment. Everyone's situation will be different but I am a huge fan of leveraging "good" debt and also making your investments cover your luxuries as long as you re meeting and exceeding your financial goals.

WOW, yeah I have property already, and based on some of these comments...I'm in the right place as a car guy. LOL, mean, we must all be between 50 and 70, some 80+ here. I have the cash ready to go, and that is my take on it. As for the property, I've got 2% on my house, had it for a while. Sold all other properties, so I'm not really in the mix like you on a new house. But you are right...the FEDs want people to stay in debt.

[23RedMist]

I paid cash. I wouldn't take a loan on a depreciating asset, especially in this market. Interest rates are approaching return rates on investments so it doesn't make sense to finance just to invest the remainder. Whether we want to admit it or not, these cars will depreciate at some point. Like My1stVette I had plenty of time to save.

Agreed. But when I see a lot of these younger guys out here with a payment of $1500 or more, I cringe. They get upset, but I have told a few people, you are living outside your means. I saw a guy on youtube with a red C8, he spec'd it well. But he spent over 20k in mods, just to make it look a little different. No procharger, no blower...nothing. He got upset when I ask if it were paid off. I just told him, I respect his build, but I would not drop 20k in a car that's financed.

[23RedMist]

One other thing to consider it the tax impact. If you are pulling the cash out of an IRA it will increase your adjusted gross income. That was my position so I financed a portion of the Z06 @5% to keep under a higher marginal tax bracket and increased Medicare premium. My income is from a mix of taxable and non-taxable sources so paying the 5% over time is less than the taxes on the IRA distribution.

Oh, the 1st world problems of being old and retired

Yep, this is true. I'm retired Vet, and own a company for many years. I'm already in a HIGH tax bracket LOL, but I do understand. I say to people, if you can finance it and you are good with your payment amount, do it. Who are we to judge? LOTS of people have financed this car, and if I had to...I would. But my son told me, do not do it pops. You pay too much in interest. The Z06 is over a 100k too, so putting down a LARGE, I mean large portion will make it a little better for people. At least 70 to 80% down I'd say is a good portion if I were gonna finance.

[23RedMist]

I paid cash. I wouldn't take a loan on a depreciating asset, especially in this market. Interest rates are approaching return rates on investments so it doesn't make sense to finance just to invest the remainder. Whether we want to admit it or not, these cars will depreciate at some point. Like My1stVette I had plenty of time to save.

Yep, agreed. So many people think these cars will not drop in value, but the more they make...the more it drops. Also, I've seen some wrecked already, and some with very high miles already. I don't see very many on the road where I live, but that's not to say there not a lot out there. The car is popular, but I'm with ya on this one.

[adamsocb]

Yep, this is true. I'm retired Vet, and own a company for many years. I'm already in a HIGH tax bracket LOL, but I do understand. I say to people, if you can finance it and you are good with your payment amount, do it. Who are we to judge? LOTS of people have financed this car, and if I had to...I would. But my son told me, do not do it pops. You pay too much in interest. The Z06 is over a 100k too, so putting down a LARGE, I mean large portion will make it a little better for people. At least 70 to 80% down I'd say is a good portion if I were gonna finance.

I will be in the high tax brackets too when I hit 72 and have to do RMD from my “pre tax” IRA. Between now and then I structured my retirement portfolio to be able to live off my “post tax” investments so I can stay in a low bracket. Probably an unusual situation, but it works for me.

BTW, I was about 70% down on the Z06. I only financed enough to get the tax and Medicare premium benefits.

It’s not that I need to pinch pennies. I just want value for every $$ I spend and would rather give the bank a little interest than give the government a lot of tax money.

[bartruff]

If 70% of NFL Players and about 40% of NBA players are broke 5 years after they quit playing and after making millions.....that should indicate that income does not build wealth, but that disposable income can.....it is not what you earn that will determine your net worth but what you save and invest......

Now Corvettes are relatively inexpensive......I paid 59k..... but it is common for young men to pay $100,000 or more for a 3/4Ton Four-wheel Drive Deisel Pickup and finance it for 5 or more years...and add another 5 to 10 thousand to lift it and light it and tire it and winch it ....... after a couple years they are underwater....the pickup is worth less than they owe on it.....and godforbid they have a unplanned baby (boys will be boys) and now they need to buy a ring....a house or a bigger apartment and a mini van.....they will have to borrow to pay off the pickup loan and buy the van....and soon they will be refinancing consumer debt....and complaining about the government...

Now most of us are not going to have a baby !!!! And already have a house....and complain about the government..😉

[MrAwesome]

Agreed. But when I see a lot of these younger guys out here with a payment of $1500 or more, I cringe. They get upset, but I have told a few people, you are living outside your means. I saw a guy on youtube with a red C8, he spec'd it well. But he spent over 20k in mods, just to make it look a little different. No procharger, no blower...nothing. He got upset when I ask if it were paid off. I just told him, I respect his build, but I would not drop 20k in a car that's financed.

If he is still making payments, then the bank technically owns the car. He is modding a car that someone else owns. If he misses payments, the car and the mods all get repossessed together. Doesn’t make sense to me.

[socarate]

Cash for me as well. Funny that bartruff mentioned how expensive pickups are now. I actually purchased a Ram 3500 a few months after my C8 and they were nearly identical in price (around 80k). I couldn't pay cash for both back-to-back so had to finance the truck. But whenever I finance a car I always pay it off well before the time frame. I don't like paying interest on cars if I can avoid it.

[DavidM]

I avoid personal debt like the plague. For grins I looked up a local credit union on the web before posting this just to see what interest rates on a new car are. 6.99% for up to 60 months. It goes up from there. That is for top tier credit. If if have a couple of dings on your credit the rates START at 8.99%.

[jackfrostpdx]

Normally pay cash but in 2020 the rates were only 1.49% so I locked it in. Hasn't been hard to make up the interest payments via investments.

Would not make the same call given today's rates.

[smajicek]

Cash here as well, just wired $177,535 to mm for my z06 built Monday. Still will need to pay 7.75% sales tax once it arrives in California, another $1500 for registration, $5k in ppf and ceramic coating and it's just a little over$200k. I bought my 2nd home in 1990 for $170k wow times have changed