View Single Post
Old 12-11-2005, 02:45 PM
jetstream23 jetstream23 is offline
Officially Welcomed to the 'Fest
Location: Phoenix, AZ
Join Date: Mar 2004
Posts: 3,229
Mein Auto: 330i, Toyota Land Cruiser
Originally Posted by Tumbler
For those reasonable people who own a home and are paying off their M3 I would like to offer a financial tip. Home equity loans are going for ~5.5% right now (over 700 fico score and good credit). Do the home equity loan for the five years with your same payment and the interest you pay annually is tax deductible.

For those that have a home and think the payment is too much, but you're dying to have an M3...get a low rate home equity where the interest is still tax deductible and if you extend to 10 years your payment will be less than the 330 or other car you're currently paying for, but don't want. I don't recommend this unless you think at some point you can catch up and pay the loan down sooner or else the interest will eat you up even if it's tax deductible.

By the way, don't lease cars unless you can write it off. Unless you live in a state where there is no sales tax like Montana or Oregon you are paying the entire amount of sales tax on the MSRP. Most people think you're simply paying sales tax on the MSRP - residual, but that is not the case in most contracts.

I offer this up because if you really want an M3 or other $50k automobile there are ways to finance smart and then ways not to.

True but you end up changing the collateral on that loan. I love when the latest financial *****s start pitching loans to people who can't afford them or try to encourage them to "consolidate their debt" into "one low monthly payment." They push people to take credit card debt, car loans, etc. and roll it into a home equity loan. Now, guess what, you've taken some debts that were previously unsecured and backed them up with your home so if you find yourself in trouble (medical emergency, etc.) and can't make your payment then you could lose your house. This is a somewhat unrealistic situation but highlights the potential for financial problems when people either overextend themselves or choose the wrong method for paying or financing purchases.
2005 330i | ZHP, Xenons, Jet Black/Natural Brown (Black Cube)

Reply With Quote