GT3 Diaries

Financing a 911 GT3

Buying a Porsche 911 GT3 of any vintage is an expensive endeavor, especially if you’re like me and prefers a model made in this decade. Spending six figures on a fun sports car is far from the usual automotive purchase, and I’m most certainly not well enough financially to carelessly drop such amounts of coin. The GT3 represent the prototypical car enthusiast “dream car” for me, and as such it does involve some monetary juggling in order to purchase it.

As mentioned, I am not made of money, I do not come from money, and my salary from employment is solidly middle-class, so long as you discount that I live in San Francisco, one of the most expensive region on this planet. The reason I can afford a car like the GT3 is two fold: one, I’ve been saving religiously ever since I started working, and two, I don’t spend much on other items materialistic.

When you love cars as much as I do, there’s zero qualms with spending such exorbitant sum on the hobby. I just have to cut back on other parts of my budget to bring about the proper balance. Honestly, if that money isn’t spent on cars, it’ll probably be something else; I’m not any different than people who choose to go traveling all over the world; they have their passion, I have mine.

Indeed it’s much easier to hate on the person who’s got the super nice car, isn’t it? Oh, isn’t this some rich douchebag. Few would see a Lamborghini driver and and think the guy must have worked tirelessly for years to afford his dream machine. No, it’s far easier to jump to the conclusion that it’s a silver spoon, or yet another rich tech bro.

I don’t put stock in the perception of me by others; I can’t control their feelings, only me own.

Even with the money I’ve diligently saved, I’m going to need additional financing to buy the GT3. Contrary to popular belief, even rich car folks, who presumably can pay the full cash amount for a car no issues, finance their purchases. It’s the logical thing to do: if interest rate on a loan is lower than the rate of return possible elsewhere, any extra cash beyond an appropriate downpayment is better served not tied up to vehicle.

I of course don’t have such “extra cash”, but nevertheless I need a car loan. How exactly does one go about borrowing money for a used car selling for six figures? The same as any normal car.

If I were buying a brand new car, the process would’ve been easy: get a loan at the dealer. They usually have the best deals because manufacturers tend to subsidize loans on new cars with low interest rates. Obviously I am buying a used car, so rates a dealership can get me will be the same as I can get privately at a bank or Credit Union. To make things worst, the Fed raised interest rates three times in 2018, so the cost of borrowing money have gone up commensurately for everyone.

Credit Unions were where I started my search. From the bit of sleuthing online, the name that came up most often was PenFed. It seems lots of car guys have financed their purchases through them, and particularly, Youtuber Doug DeMuro borrowed money via PenFed to buy his Ford GT. All this gave me great confidence, and PenFed’s rates are amongst the most competitive, too. I was entirely ready to apply when I perchance saw another option.

LightStream was a name that came up often amongst the Tesla crowd. Like most other banks, LightStream offers loans for automobiles, but with one key differentiator: LightStream does not require collateral. In typical car financing, the bank would keep a vehicle’s title until the entire loan amount is paid in full. The buyer doesn’t really “own” the car outright until that is done - the bank has a ‘lien” on it. The title acts as collateral for the bank so that in the event of non-payment, there’s recourse to recoup money.

LightStream lets the borrower keep the title, and are only trusting on his or her word (and credit history) that the loan agreement will be fulfilled. This was immediately attractive to me because it means I wouldn’t have to wait five years to have the GT3’s title in my hands. Even more impressive is that LightStream will match any rate you are able to secure at other banks/credit unions, effectively costing nothing to switch to them for a loan.

It has to be said that in order to quality for a LightStream loan, you must have superb credit, with a score well into the 700s, preferably 800s. People with not so good credit are too much of a liability to be given an unsecured loan at any interest rate.

Applying for loan with LightStream is fantastically simple: fives minutes filling out an online form, and within a few hours, I got an email stating my application was approved. After that it’s only another five minutes or so on the website to complete the process. Depending on the amount you’re asking to borrow, LightStream might not even ask for copies of pay-stubs and money accounts - they did not in my case.

The process was ridiculously easy, and the loan amount was depositing into my checking account the very next day. With the entire potential cost of the car secure and ready, the game was on to find the suitable GT3 to buy.