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Discussion Starter #1 (Edited)
Ok the little devil and angel on each side of my shoulder are struggling with each other on whether to buy an Elise. I kind of don't like disclosing financial information but maybe some of you finance guys can help me make a decision.

So here's my situation. I own my house and it's worth about $520,000 in the current state of the market. I have no other debt except for a home equity line of credit that I took out on the house. The ony debt I owe is $24,000 on the home equity line (no credit card debt at all:D) The interest rate is super low right now, only 3.75% to 4.50% but is variable. My wife does not work right now (but plans on getting a part time job once both children are in school) so my income which averages about $68,000 a year before taxes is the only income we have. Two children, 4 & 5, one of which has a private school tuition of $4,000 a year, not bad really.

My plan is to buy the Elise on the home equity line of credit which I can right off the interest by the way. I plan on selling my 1997 BMW 528i (hopefully getting at least $8,000) and putting that towards the purchase of the Elise.

I drive a company car all week long on the road (outside sales rep) so I will only be driving the Elise on the weekends for fun not putting many miles on it. My Bimmer is no fun to drive on weekends :( If were an M5 it would be a different story. So I plan on keeping the car for at least 15 years. I'm planning to take at least 12 years to pay it off with the $24,000 already on it and then adding the Elise price minus my BMW sell.

I can justify buying the Elise and turn right around and tell myself I shoulnd't...it's a constant struggle. I feel like life is to short and hell who knows if the world will even be around after 2012:huh: What should I do finance experts???
 

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68k a year? yikes....


Your house's value has nothing to do with monthly cash flow, your numbers are useless.

If you lost your job and were forced to sell your house, could you GET 520k in this market? and does that pay off BOTH of your mortgages?


Im struggling to imagine how a 68k income is paying for a 520,000 house
 

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I dunno man that seems like you are stretching it a bit... and 12 years:crazyeyes

I would start a lotus savings account and just see how much you can afford to put towards it every month... then if you decide to take the plunge you will have some money saved up

tho I am pretty conservative when it comes to money(except when it comes to getting a lotus hahaha)
 

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Discussion Starter #4
68k a year? yikes....


Your house's value has nothing to do with monthly cash flow, your numbers are useless.

If you lost your job and were forced to sell your house, could you GET 520k in this market? and does that pay off BOTH of your mortgages?


Im struggling to imagine how a 68k income is paying for a 520,000 house
The house is already paid for...I have NO mortgage payments! All I have in debt is the $24,000 I owe on my home equity line that I took out against the house. So really I owe $24k on the house if you want to look at it that way. Yes, we could get $520,000 for the house even in the current market state. Nashville is not hurting as bad as some other markets.
 

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With that income and debt, I would vote wait.

You have a BMW that is paid off and is in fine shape I'm assuming.

You say 'no credit card debt', but where did the $24K come from? If it's credit card debt that you took out the home equity loan to pay off, then you still have credit card debt.

You say that you own your home, does this mean that there is no mortgage on it at all? Is the $24K the only loan you have against your house? If so, bravo! If not, then what are you paying on your house (mortgage, PMI, taxes, insurance)?

Pay off your $24K home equity line first. With no mortgage it should take you less than three years to pay that off.

Basically unless you are about to sell your house, it's worth zero. It's not going to help you make your payments on a car or pay off the home equity unless you do something stupid like get a reverse mortgage, OR you plan to sell the house and move into something smaller and use the extra cash to buy something.

Also, many, many folks are finding out that their 'about $520K house in the current state of the market' really isn't worth $520K. I've watched house after house stick on the market for months and months and drop in price (and still not be sold). That price range is not the 'unload this thing in a few minutes' price range that the sub $150/180K market is. But again, this is all moot if you are not about to sell the house.

All this said, if you could eliminate the $24K of debt AND pay off the Lotus in two years (let's say you get a used Elise and live frugally) then I'd say go for it. However, planning on taking 12 years to pay off the debt? That's insanity.

If you want the Elise experience 'for weekend fun' then I would suggest getting it some other way than putting yourself into debt for 12 years. You could do what I did this week: Rent a kart at a kart track. There should be something like this in your area.

Or possibly find a LotusTalk member who lives in your area and who tracks his car. Share the costs of tracking the car with him and maybe you can both run on a weekend in different run groups. (There are two guys who do this with a Vette at a few of the tracks I run on and it works well for them.)

I would also suggest getting a used Miata. You should be able to get a nice used Miata for a straight up trade for your BMW. A Miata will have 90% of the fun of the Elise at 1/5 the cost of a new Elise. I used to drive one and they are great fun.
 

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68k a year? yikes....


Your house's value has nothing to do with monthly cash flow, your numbers are useless.

If you lost your job and were forced to sell your house, could you GET 520k in this market? and does that pay off BOTH of your mortgages?


Im struggling to imagine how a 68k income is paying for a 520,000 house
He either bought it when it was worth much less, or he inherited it. Not having a house note is a huge bonus. But, be careful with that line of credit...you are slowly creating a house note. Realistically your net income is about 51k and buying a new Elise would be almost 1 year of income (probably over 1 year after interest). I'd probably go for it (with the plan to use the Bimmer and credit line), but I'd look for used 05 or 06 to keep the costs down. Good luck either way.
 

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The house is already paid for...I have NO mortgage payments! All I have in debt is the $24,000 I owe on my home equity line that I took out against the house. So really I owe $24k on the house if you want to look at it that way. Yes, we could get $520,000 for the house even in the current market state. Nashville is not hurting as bad as some other markets.
I went to nashville a couple months ago and its still killing me!rotfl
seriously tho I would try saving money for a downpayment for 6months or a year depending on your patience, and see where you stand...

kids and women are expensive... you never know when somethings gonna happen, I would try to keep debt as low as possible just in case
 

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Congrats on owning the house.

I'd still vote getting rid of the $24K in debt first. With no mortgage you should be able to pay $1500/month on that loan pretty easily. I'm assuming roughly $3k/month as your take home pay here. Of course that means that you are living very frugally (especially with two kids!), but it can be done if you want to.
 

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Discussion Starter #12
Ok, some other points of interest to help me decide...

1. Again, I have NO mortgage, the house is paid for and I don't plan on selling my house for at least 25 years. We paid $300,000 for the house when we moved in in 1997. The house right across the street sold for $520,000 last month and it was on the market for less than 2 days!!!

2. someone posted buying a new Elise...I will NOT be buying new...I will be looking for an 05 or 06

3. In 3 to 5 years I should be making close to 6 figures with my company...you need to take that into account.

4. Yes, the BMW is paid for and will be sold to put as a down payment on the equity line.

5. I forgot to mention that I have about $5,000 in vintage keyboards that I'm planning to sell on Ebay.

6. I also forgot to mention that I have been a wedding videographer on weekends in the past and could easily pick that up again to make extra cash. I make about $850 to $1,200 a wedding.

7. I also plan to quit smoking and start drinking PBR instead of expensive stouts and porter beer:rolleyes: That adds at least an extra $200 a month that I can put towards the home equity payment.
 

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Ok, some other points of interest to help me decide...

1. Again, I have NO mortgage, the house is paid for and I don't plan on selling my house for at least 25 years. We paid $300,000 for the house when we moved in in 1997. The house right across the street sold for $520,000 last month and it was on the market for less than 2 days!!!

2. someone posted buying a new Elise...I will NOT be buying new...I will be looking for an 05 or 06

3. In 3 to 5 years I should be making close to 6 figures with my company...you need to take that into account.

4. Yes, the BMW is paid for and will be sold to put as a down payment on the equity line.

5. I forgot to mention that I have about $5,000 in vintage keyboards that I'm planning to sell on Ebay.

6. I also forgot to mention that I have been a wedding videographer on weekends in the past and could easily pick that up again to make extra cash. I make about $850 to $1,200 a wedding.

7. I also plan to quit smoking and start drinking PBR instead of expensive stouts and porter beer:rolleyes: That adds at least an extra $200 a month that I can put towards the home equity payment.
dont count your chickens before they hatch
put some money away first
 

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keep hoping that your house taxes dont go up, put money away in savings for your childrens college needs and essentials.. wait till you get paid more $$ and just enjoy the house you have and your wife and children... Put some of the extra cash into a car fund and wait a bit to see what you can come up with... get a much larger down payment or buy it in cash ;) I dont see what the rush is, but i know the urge to just go get one already!!! ;o)
 

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Ok, some other points of interest to help me decide...
We paid $300,000 for the house when we moved in in 1997.
Im confused...you payed 300k cash for a house, but you make 68k per year? If not, you should still have a payment, even on a 15ry mortgage, which would cost about 3grand per month.

Lucky you if you had that kinda cash set up for you.

With 2 kids, 68k isnt nearly enough to start piling on debt imo. The equity line would probably cost you about 900/mo for a 35k loan im guessing, if you did want to go that way..
 

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Discussion Starter #16
Im confused...you payed 300k cash for a house, but you make 68k per year? If not, you should still have a payment, even on a 15ry mortgage, which would cost about 3grand per month.

Lucky you if you had that kinda cash set up for you.

With 2 kids, 68k isnt nearly enough to start piling on debt imo. The equity line would probably cost you about 900/mo for a 35k loan im guessing, if you did want to go that way..
House was paid off last year (10 year mortgage). I was making a whole lot more up until last year when I had to find a new job and took a huge paycut with the economy the way it is. Plus I paid a big chunk up front b/c of some money I inherited so my monthly payments were only $1,350 a month.

I figure if I can get $8,000 for my BMW, $5,000 for the vintage keys plus a slew of other items just collecting dust that are worth about another $1,500 that I can sell. Cut out $250 a month worth of habits (smoking, drinking, save my per diem money and eat Ramen on the road:D) Wait for that right Elise for around $25 to $30k. I could literally walk away with only owing about $34,000 total. I could easily pay that off within 5 to 7 years, especially if I pick up a wedding or 2 each month on the weekends.

You know, I love my kids and family and it has been all about them for the the past 5 years of my life spending only for them (hell, most of that $24k is the damn Lexus RX300 that I bought my wife 3 years ago). I'm starting to go a little insane, no really, I'm serious. After the test drive 2 weeks ago I feel like I need the Elise for therapy from the crazy roller coaster of a life I've had the past 5 years. I won't go into all the details, but I need a treat to myself.
 

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house is irrelevant(except for taxes and insurance ick)

I told you women and kids are expensive hehe

buying her a lexus I think was the first blunder here...

given the volatility of you career I would be even less inclined to stretch it...

save save save... and if the kids are off at school maybe the wifey can get a job I think that would REALLY make a difference
 

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Discussion Starter #18
house is irrelevant(except for taxes and insurance ick)
well actually the house is relevant...i would have to get a traditional car loan for the Lotus with a higher interest and fixed payments, but since I own the house and have the equity line I can pay for the car on that, therefore not paying a fixed amount every month, lower interest rate AND I can write the interest off on my taxes. So actually there's a big difference.
 

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I'm starting to go a little insane, no really, I'm serious. After the test drive 2 weeks ago I feel like I need the Elise for therapy from the crazy roller coaster of a life I've had the past 5 years. I won't go into all the details, but I need a treat to myself.
Then do it. If you get an 05, you won't take too big of depreciation hit.

College funds suck to even think about in the future (at 100k+ each)
 

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I understand your eargerness to get a lotus... trust me
but I think you are looking at it the wrong way
using your house as collatoral for a car(no matter how awesome) isnt a good move.
If you hold off, and are able sell the keyboards, do the weddings, get a raise, ect... then when you are ready you will probably be able to pickup a nicer car, perhaps a supercharged model.
you jump in now you will pay like 14k in interest on your HEL, thats like HALF a used elise
 
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