Report: 40 Percent of Corvette Buyers Pay with Cash

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Report: 40 Percent of Corvette Buyers Pay with Cash


Why fool with the hassle of monthly payments if you can just pay cash for your hot new C7 Corvette?

Apparently that’s the philosophy followed by some 40.3 percent of recent Corvette buyers who shelled out cold hard cash for their cars.

That’s according to research done by the credit site Experian.

The report doesn’t say what period this covers, but they did say there were 32,000 new Corvette registrations during that time.

Only 56.9 percent of buyers had to finance their purchase.

By comparison, 79.3 percent of Camaro buyers are paying for their dream ride by the month, with another 7.3 percent resorting to leases. That means only 13.4 percent of Camaro buyers paid cash.

“With the Viper and the Corvette being on the higher end of the muscle cars reviewed, it’s not that surprising that a higher percentage of consumers paid for them in cash,” Melinda Zabritzki, Experian‘s senior director of automotive finance, says. “Our findings show that those buyers had the highest credit scores, which could indicate that they have more disposable income.”

With dealers like Kerbeck Corvette offering 1.99 percent financing, we wonder if it might make more financial sense to finance the Corvette and leave your money in your 401k?


Source:
cheatsheet.com via Corvette Forum

Related:
October 2016 Corvette Sales
What Happens When the Numbers Don’t Match?
Report: Baby Boomers Getting Too Old for Corvettes

 

5 COMMENTS

  1. A higher credit score has absolutely nothing to do with income. It just shows that you live within your means and you pay your bills on time.

  2. Which option would you select?

    In 2011, you find a good deal on a new 2011 Grand Sport 3LT convertible for $60,000 and decide to buy it. You’re trying to decide if you want to finance it or pay cash for it. You know you are financially able to do either. Do you pay cash for the Corvette and invest what you would have paid in monthly payments or do you finance the Corvette purchase and invest the $60,000?

    Option 1 – Pay Cash for the Corvette and Invest Monthly Payment Amount. Five years and 40,000 miles later, you sell the Corvette for KBB Very Good Condition Private Party Value of $33,726. Over the same five years, you have invested the $1,051 that you would have been paying to make monthly payments, earning 8% compounded annually. At the end of five years, your $60,000 cash is now $33,726. Your $1,051 monthly investment is now $77,158 (before taxes). Your net at the end of five years is $110,884 ($33,726 + $77,158).

    Option 2 – Finance the Corvette Purchase and Invest the $60,000. Financing your purchase for 60 months at 1.99% interest results in monthly payments of $1,051. This will cost you $3,084 in interest charges over the 60 month loan. Five years and 40,000 miles later, you sell the Corvette for KBB Very Good Condition Private Party Value of $33,726. Over the same five years, your $60,000 investment has earned 8% compounded annually. At the end of five years, your Corvette sell of $33,726 nets you $30,642 after deducting loan interest. Your $60,000 investment is now $88,160. Your net at the end of five years is $118,802 ($30,642 + $88,160).

    One final note. The breakeven point for Option 2 is 1%. In other words, if you can borrow the $60,000 at 1.99%, anything over 1% annual interest earned on your $60,000 investment will put you ahead financially over Option 1.

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