My wife and I own outright the Accord EX V6, paid cash 23,350 for it. And a poopy Integra GS. Near zero debt, I'm really thinking home equity loan for new IS300 or TL-S. Trying to sell the Integra, no takers though.I can right off the interest for taxes, just wondering. Oh yeah, is the Accord G6 the same as TL, don't everyone freak out, but the engine and transmission are the same, yes ?

 

A home equity loan might not be a bad idea. You will almost certainly pay a higher interest rate, but you will be able to write off your interest.

I think it comes down to doing the math. If you will save enough in taxes to make up for the extra interest you are paying, then you might want to go for it. You can go to http://www.turbotax.com and they have a pretty decent tax estimator, so you can play with the numbers.

Only other down side I can think of is that if you can't pay a car loan, you lose your car, but if you can't pay your home equity loan, you lose your house. So make sure you are comfortable putting up your home as collateral before you go that route.

Mike


<FONT COLOR="#800080" SIZE="1" FACE="Verdana, Arial">[This message has been edited by mikester on April 06, 2001 @ ]</font>

 

Docwestin, I agree with Mikester on all points. Since TX does not have a state income tax, your comparative calculation is simple. Take one minus your tax rate and multiply it by the (probably) deductible equity loan rate and compare that to the car loan rate. (Check with your tax advisor!)

For example, in a 31% marginal Federal bracket: (1-.31)=.69

If the home equity rate is 9%, the taxable equivilent rate is .09 x .69 or 6.21%.

Note, too, that home equity loans and lines often come with heavier up-front costs than an auto loan and most home equity lines of credit are at a variable rate whereas many home equity loans are at a fixed rate. If you feel rates are on their way down, a variable rate may work to your advantage at this point in the short term but possibly not over the life of the outstanding balance.

I reiterate what Mikester stated: Be certain of your ability to repay the debt before pledging your house!

Immodestly, I do have some credentials here. I have been in the banking business for 27 years and am also a licensed Certified Financial Planner.

If anyone is interested in how this calculation changes when your state has an income tax, let me know.

But, I fear we are OT
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The last 2002 I owned was a tii (license plate 72BMUU)

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<FONT COLOR="#800080" SIZE="1" FACE="Verdana, Arial">[This message has been edited by tlsdave on April 06, 2001 @ ]</font>

<FONT COLOR="#800080" SIZE="1" FACE="Verdana, Arial">[This message has been edited by tlsdave on April 06, 2001 @ ]</font>

 

tlsdave,
I just sent you a private message. I would like to get more information from you regarding this if you don't mind.

Thanks!

 

Thanks for the info, I think I am going to just wait for awhile. Sell the Integra and use the cash of my recently sold Legend G2, which I miss so much, along with cash that I'll save, I'd much rather drive the poopy Integra and then pay all cash or mostly cash for the TL-S, hopefully I can 'offically' join this forum, around November, with a new TL-S, do think prices will have tampered off by then ? click here for photos
<a href="http://albums.photopoint.com/j/View?u=1359408&a=10130461&p=34310995"><img src="http://www.photopoint.com/images/pplogo3.gif" width="88" height="33" border="0" alt=""></a>

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