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The idea was this. You buy a new [expensive car] and have it on loan. You pay off the loan steadily. Then, a few years down the road, you'll make it so that you
by sukuriant 14y ago
The idea was this. You buy a new [expensive car] and have it on loan. You pay off the loan steadily. Then, a few years down the road, you'll make it so that your loan is less than the amount of money you could sell the car for; then you sell the car. The difference is the amount of money you've made.
I did the math and you wouldn't be getting all of your money back; but at the end you made a profit and you did get to drive a rather expensive car.
- brc 14y agoThat is completely wrong. In order for your plan to work, you'd need said car to increase in value more than the combined amount of: - taxes paid - storage costs - service costs - insurance costs - interest costs on the loan The car would have to do what 99.9999% of all cars on the planet fail to do - increase in value once it was purchased. Now, if you live in a high inflation country, then the car may nominally increase in value more than the loan - but you're still losing money. You wouldn't be able to, say, swap the used car for a new one, so it's not really worth more. >I did the math and you wouldn't be getting all of your money back; but at the end you made a profit and you did get to drive a rather expensive car. If you didn't get your money back, by definition you didn't make a profit. You made a loss. A profit would be where you got all of your original capital back, and then some extra after all the expenses paid. It just doesn't happen. Especially with brand new supercars.
- MortenK 14y agoSelling your car at a price above whatever is left of your loan, does not mean you've made a profit!