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How I was able to afford a GT4 at age 27

It’s 1am in the morning and I can’t fall asleep. I’m thinking about how tomorrow I am going to drive the GT4 to some undecided empty parking lot to take photos for a classified ad, officially marking my GT4 as actively for sale.

This has me reflecting on how fortunate I am to own this car and to have had this opportunity to own such a special vehicle. It also presents an opportunity to be fully transparent about how I have been able to afford to daily drive a GT4 and that’s what I’m going to describe in this piece.

Straight to the point: Financing.

The cars that I buy are generally financed and the GT4 is no exception. In fact, the GT4 was entirely financed.

When I bought the GT4, I was making a decision to do two things. First, get back into a sports car again. Second and arguably more importantly, I had just bought my first brand new car (2017 Alfa Romeo Giulia Quadrifoglio) and I was a little freaked out by the initial depreciation. I know that new cars depreciate but with the initial reviews of the Quadrifoglio I thought that values would hold stronger. They didn’t. In 6 months I lost $14,000 on that car.

When I bought the GT4, I was not only looking to get into a sports car again, but I wanted a slower depreciating car. One that I could put some miles on and enjoy. Private party value for my GT4 right now is only about $5,000 less than what I paid for it. I even moved some of the depreciation from my trade-in on the Quadrifoglio into the loan and in 8 months my car is worth enough to sell private party, make my money back, and I’ve dealt with that new car depreciation that was freaking me out before.

I am financing the GT4 in its total value + $5,000 (some of the depreciation from the Quadrifoglio) over 6 years with a total payment of just under $1,800 per month.

$1,800 per month is a lot. How?

I work full time as a software engineer for a start-up based in NYC. I live in what my company (and I) considers to be a high cost of living city. As a result, I am paid a salary equal to what I would make if I lived in NYC and went into the office every day.

Additionally, I’ve been writing software on the web for over 10 years now, professionally.  I’ve amounted a significant amount of experience and as such, a pretty respectable salary. Even though it’s based on experience and other reasonable factors. I still feel incredibly lucky to make enough to afford a car like this.

How much does it cost to insure a Porsche Cayman GT4?

I am 27 years old with a clean driving record and the insurance for the GT4 and my wife’s 2013 Ford Focus runs us about $210 per month. The GT4 probably accounts for about $160 worth of that I would imagine.

Actually, better question… why spend that much?

I’ve been a car enthusiast for quite a while now so I have no problem paying a substantial amount of money per-month to own a car that is really thrilling. A car like a GT4, or an Alfa Romeo Giulia Quadrifoglio, a BMW M2/3/4, a Porsche 911… they all are incredibly special cars and I may not always have the opportunity to own and experience them in this way.

I’m cool with spending an irresponsible amount of money on a car while I can and I will downgrade if my job or life circumstances require it. But I want to really enjoy and experience these cars while I have the means to. So I’m okay with spending a month’s worth of rent on a car right now.

What have been the running costs on the GT4 since you’ve owned it?

The only costs I’ve incurred on the GT4 are for gas and insurance. I haven’t even had to pay for an oil change myself – I had that done before the car was delivered to me as part of the negotation.

There’s something bittersweet about buying and selling a car quickly, but paying for 0 maintenance on a car like a GT4 has to be seen as some kind of benefit.

If I were to cross the 1 year mark with the GT4, the next annual service would run me about $1,500-2,000. That’s comparable to what I paid for my 2013 911 Carrera and this is a Porsche GT car!

Does DailyDrivenCo pay for your car?

Actually no, not at all. I pay for DailyDrivenCo. It doesn’t pay me yet. At the time of writing this I’m operating the business at a loss and I’m happy to do so. This is a fun hobby and I want to keep it going as long as it’s enjoyable.

Hopefully as traffic picks up I am able to start profiting from the site and the effort I put into social media. But if it never does, it’s still a fun experience to share my own experiences with other car nuts. It’s even more fun hearing from all of you and making connections within the car world that I may not otherwise be able to do if I didn’t operate this site and share my ownership experience on social media.

If you want to support me and the site, using the store is the best way to do so. If nothing there is catching your eye, send me an email. Let me know what you’d be interested in seeing. And if you’re not here to spend money, that’s fine too. Thanks for supporting this journey by reading and following on social media.

Would you recommend financing cars the way that you do?

I would. But maybe not exactly the way that I did with the GT4. With the GT4 I financed the value of the car and the negative equity in the Quadrifoglio that I was coming out of. This isn’t really advisable to do. You should also aim to put down 10-20% on whatever car you’re buying. And definitely do not finance the taxes and fees associated with buying a car. Save up for those things and pay for them outright.

Someone once told me that you shouldn’t spend more than 20% of your gross income on a car, 30% on a home (renting or mortgage + insurance). My credit union also likes to see that between rent/mortgage and auto loans, you owe less than 48% of your gross monthly income.

I take that 48% number and I instead apply that to my net monthly pay and I don’t look at the home and vehicle costs separately. I am happy to spend the same amount on my car payments as I do on my rent.

This is my approach. I can’t recommend this for everyone but it works for me and I’m super comfortable with it.

 

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Published inFinancingPorsche Cayman GT4