Longer financing periods for NSX's possible?

[omeys_berlina]

The way they determine finacing is a number of different ways. i'm not sure how it works in the U.S., but in Canada it can go a few ways.

Like i said in a previous post, it depends on the kind of loan...and getting a personal loan maybe be better in some cases.

The reason you can get more months out of your CAR loan is based on km's of the vehicle. you can get a longer term on your Car loan if its under 30 000km's. The lending company looks at this because the vehicle is an asset to them because if you have to give the car back or its repo'd, or wrecked (God forbid) they will either send the car back through the auction or get book value on the vehicle.

Approvals are OBVIOUSLY based on previous credit. They determine the amount by how much you make, minus how much you have on credit, and how much all your bills are permonth, and how much of your TOTAL credit has been utilized.

This is why older NSX's are a little more difficult to get a CAR loan on. They usually have higher km's, and book values only go as far 96-97 here in Canada. So for older NSX's it is best to get a personal loan on, from a private lender (By the sounds of it) Capital One, or others like Wells Fargo, not sure if you guys have Meridian or Travelers, or even your banking institution.

Basically, low km's, year of the vehivle being 99+ = longer term. The reason some people get there loans stretched on porsches & ferrari's is possibly because they are newer cars and the km's are extremely low. have you ever seen a Ferrari with 100000km's on it? Pretty rare.

Your Rate is based on your past credit experience; Good credit = good rate which then = good payment, bad credit or not so great = decent to high rate which then = larger then normal monthly payments.

If you have any questions on financing feel free to PM me or e-mail. [email protected]

 

[omeys_berlina]

Also, if you do get a high rate from your lender, ask them if you are able to refinance the loan. I know that if you show a commitment and have made the payments on time a so fourth, after 18 months your loan can be re-financed at a better rate. Thats just how it works here in Canada with most lenders...not sure what it is like in the states.

 

[comtec]

Hey Eddie,
When did you change your avatar? I like it.

 

[ediddynsx]

Hey Eddie,
When did you change your avatar? I like it.

\


Glad you like it just yesterday I changed it. :biggrin:

 

[djdrock]

I think any of you financing a car for more than 48 months are crazy, especially at a rate higher than 6.5%. A loan at 9.25% for 72 months is absurd, unless you plan on paying it off in 2-3 years.

Maybe financing most cars, yes, you might be correct. But an NSX in excellent shape, there should be no problem in going 60 to 84 months at 6.5% or even a little higher. Remember, it is about how quickly a car depreciates, not just the rate or term.

Frankly, it makes less sense to finance longer terms on new vehicles, which depreciate tremendously early on. People are left upside down in many more cases than not. Why most banks and credit unions give people better rates on newer vehicles really does not make good sense.

With the NSX, a car that one might argue could easily hold its value, or slightly appreciate, would be a great candidate for longer financing terms.

If you have to resort to 7 year financing plans and other financial absurdities, you're just not ready for an NSX (or a Ferrari, or BMW, or any other expensive purchase).

Again, not true!

Just look at these numbers as an example:

If you financed an older NSX (in excellent shape, low mileage) for $35,000 with no money down at 8% for 72 months (6 years), you would have applied apx. $4700 to the principal in the first year. At the end of the second year, you would have applied apx $9800 towards the principal.

If you can show me an older NSX, that in 2 years depreciated more than $9800, which was well-maintained, then maybe you have a point. Financing at 6 or 7 years is in no way absurd. Just do your homework. The most important thing when finding your NSX, is getting the right car. Many people have gotten a "deal" and ended up with thousands upon thousands of dollars in financing. At the end of the day, it is about how much money you have to put into the car, including maintenance and financing, upgrades etc...

 

[Ski_Banker]

DocL is right - generally - if you have to finance for 6+ years on a 35k car, you probably shouldn't buy the car. Whether upside down or not.

Only caveat would be if you are extending the finance period simply to invest the difference in a higher returning investment. It would make sense, then, if you want to place the finance game. But most folks aren't in that boat.

 

[djdrock]

No offense, but you obviously don't understand depreciation and net cost of borrowing. The whole purpose when financing a vehicle short term regardless of year, is to avoid negative equity. If a person can break even, with the average car and truck these days, they are doing well. With the NSX, your odds are greatly increased of staying ahead of any depreciation which might take place. If financing an extra year or two will get the EDUCATED buyer the car they want, then by all means, it should not be a problem.

 

[jonas1jp]

No offense, but you obviously don't understand depreciation and net cost of borrowing. The whole purpose when financing a vehicle short term regardless of year, is to avoid negative equity. If a person can break even, with the average car and truck these days, they are doing well. With the NSX, your odds are greatly increased of staying ahead of any depreciation which might take place. If financing an extra year or two will get the EDUCATED buyer the car they want, then by all means, it should not be a problem.

Just listen to this guy and stop needlessly telling everyone that you have enough money to buy one outright. He's got an excellent point.

 

[Ski_Banker]

No offense, but you obviously don't understand depreciation and net cost of borrowing. The whole purpose when financing a vehicle short term regardless of year, is to avoid negative equity. If a person can break even, with the average car and truck these days, they are doing well. With the NSX, your odds are greatly increased of staying ahead of any depreciation which might take place. If financing an extra year or two will get the EDUCATED buyer the car they want, then by all means, it should not be a problem.

No offense taken. But you obviously don't understand who bears the risk of negative equity -- the lender. Yes, you may have to write a check if the car is wrecked and insurance doesn't cover the full loan balance, but that money would be spent either way (monthly payment or lump some to make the bank whole -- WHICH you could probably negotiate cents on the dollar). The underlying issue is should you buy a $30k car if you HAVE to finance it for 7+ years, which, IMO, is poor personal finance. Better than perpetually leasing, but still not a great idea. My $02.

 

[NA1MT]

I'm not a tax accountant but I think you need to be careful with that.

In order for home equity loan interest to be tax deductible, doesn't that require the funds be used for something related to home improvements rather than say taking an around the world cruise (or buying an expensive car) ???

The answer to that is no. That is the route I went...had the funds but would rather take that chunk and use it for something that "makes" more of the same:smile: I also saved almost 1 1/2% on tghe rate of the loan by going that route over conventional auto loan. I guess the situation varies with each individual on whats makes best sense for them.

 

[djdrock]

No offense taken. But you obviously don't understand who bears the risk of negative equity -- the lender. Yes, you may have to write a check if the car is wrecked and insurance doesn't cover the full loan balance, but that money would be spent either way (monthly payment or lump some to make the bank whole -- WHICH you could probably negotiate cents on the dollar). The underlying issue is should you buy a $30k car if you HAVE to finance it for 7+ years, which, IMO, is poor personal finance. Better than perpetually leasing, but still not a great idea. My $02.

As a banker for 11 years, I can tell you, that I have never met a single customer that has any concern about the banks position when it comes to getting a loan. But from the perspective of the bank, they are at a higher risk when they lend money to Susie Sweetface at full retail value, at 7 years to go out and buy her Kia Rio or her Chevy Cobalt. I am not saying that I disagree with you, in that longer term financing is a bad idea. Generally speaking, you are correct. I simply want to point out that if there are few cars worthy of longer financing, and that the NSX is definitely one of them.