Should I buy a Supercar with cash or finance? Pros and Cons...
People have asked me in the past: ‘Why would you spend that much money on a car?’ My response was: ‘Well, you can’t drive a property!’
We are living in amazing times and are witnessing the very last breaths of the most incredible combustion engines ever made, some would say - the pinnacle of naturally aspirated and forced induction supercars and certainly, the end of an era.
On the other hand, it’s hardly surprising, humans have never been content to rest on their laurels and are always seeking to advance to ever new, lofty levels. Supercar and Hypercar designers and engineers are no different. Even though I love my collectable Supercars from yesteryear, I personally can’t wait to see what’s also coming next.
As a business owner or an entrepreneur, you’re always looking at ways to improve and maximise your hard earned dollars. Apart from negotiating the best deal on your next Supercar, what it comes down to is: What will give you the best bang for your buck - using cash or financing?
Buying a new car is a big deal and for most it’s the biggest purchase in life outside of real estate. This Supercar purchase was probably a long time coming and something that you’ve dreamed of owning and you want to ensure you maximise your situation. I’ve always taken the approach that every dollar should be working for you. This includes money spent on cars.
Sure, finance will cost more in the long run, however allow me to elaborate.
Should You Buy a Supercar with Cash or Finance?
Explore whether financing or paying cash for your dream Supercar is the best choice for maximising your investment and preserving your wealth.
Preserve cash
The first benefit of buying a Supercar with a loan or lease is paying less cash upfront. As someone who’s self-employed, it’s always a good idea to keep more cash on hand (more so than for someone who has a full-time job or an investor with recurring cashflow). A loan or lease means you don’t have to drain your savings.
Earn more
If you can earn a higher rate of return from a business venture, property deal or investment, why would you use tax paid dollars to buy a Supercar? You are better off keeping the cash for as long as possible, for you never know when an opportunity will present itself. This way you will always have cash available.
Invisible financial benefit
Remember that $1 today is worth less down the road. If you can pay a dollar today or pay a dollar in the future, you are better off paying in the future. Thanks to inflation, a dollar in one, two, or five years is almost certainly going to be worth less than a dollar the day you buy your Supercar.
Lastly, it provides protection
Having an expensive Supercar can potentially make you a financial target. By having it financed, it is one less thing that a party can target. If your Supercar has any financial encumbrance, it makes it especially difficult to access any real value if you are ever in a legal situation.
Whichever way you decide to buy your Supercar, cash or finance, remember, you only live once. This is your time to enjoy what you have worked so hard for!
Live Life!
Article brought to you by SupercarFinance.com.au