Taking Delivery On Is250 Friday

[RonandKay]

Matador IS250 coming in this Friday! Trying to decide on if we should finance with Lexus (5.9%) or get a home equity loan (about 7.9%). Seems like interest deduction on home equity loan would trump lower rate for auto loan. But Lexus offers this so-called "Gap Insurance" with their loan.

Based on the numbers I state above, which make the most sense to go with, conventional auto loan or home equity loan?

Also, what's the dope on this Gap Insurance?

Thanks in advance.....Ron and Kay

[bartkat]

Wouldn't a home equity loan be for a longer term? Also I think it takes a couple weeks to get one through. I'd go with the Lexus loan and try to pay it off early. Dunno about gaps.

[LEXIRX330]

Check out this calculator...

http://partners.leadfusion.com/tools/nasafcu/auto08/tool.fcs

Put your rates in and see.

Also GAP insurance will pay the difference that you owe on your car if your car was totaled. Lets say that you owe 3000 more on the car than what your insurance company is willing to allow, than gap insurance will pay the 3000. Simply you are protecting your self from owing $$$ on a car that is totaled. In my opinion if you are putting enough $$$ down I would not consider buying GAP insurance (waist of money).

Hope that this helps...good luck

[mehullica]

Simple. You lose you job and can't pay with an equity loan, you lose you house and equity it has. You lose your job with an auto loan, you lose your car

[3fitty]

for what it's worth...you can also write off the interest you pay on your equity loan...so in essence you'd be writing off your complete car payment. So for tax purposes it makes sense.

As far as the statement about your equity line and losing your house. If you lost your job and couldn't pay for your home, you sell it. When you sell it, all liens would be payed off, including your equity line. So, if this were to happen, you'd sell your home and your car would be payed for in the process. The only negative side would be losing that 40+k cost of your car in equity.

HTH!

[bartkat]

Is he going to live in his car?