It’s easy to get on your high horse and look down on people who have found themselves in a tough financial spot because they didn’t do the math before they bought their car, or because they need a car so badly they had to take on a rough deal. But this loan term on a six-figure Porsche Cayman GT4 reveals that money and experience do not equal financial savvy.

A reader sent me a tip on this 2016 Porsche Cayman GT4 for sale at Evan Paul Motorcars in California. The asking price is $104,750, which is market appropriate for this rare car given the miles and equipment.

What struck me about this ad was the advertised payment of $829 per month for a loan term of 144 months. Imagine taking a car loan out for 12 years!

Advertisement

But that isn’t all—the fine print says that $829 payment assumes a down payment of 20 percent, and this does not include any tax and fees. That means that if a buyer where to put 20 percent down ($20,950) and financed this car for $829 per month over a 12-year term, they would have made car payments totaling $119,376 and spent a total of $140,326.

Again, that is before any tax and fees are applied. By signing up for this super long term a buyer would have spent 33 percent more on this car.

I wanted to get some clarification on these loan terms and I spoke with a woman named Elizabeth from the dealership. She said those terms were primarily for advertising purposes and were just “estimates.” But it still happens, and with these kinds of terms.

Advertisement

I asked her if a lot of their customers took out loans like this. She said, “They were one of their most popular products, along with other loan products that cater to international buyers that don’t have a social security number and/or an established credit history in the U.S.”

Having worked with several clients that bought high-end/performance cars that either paid cash or used substantial down payments in order to take out much more reasonable loan terms, I was shocked that these long loans were so popular.

But these super-long loans illustrate the point that all kinds of people stretch themselves financially, one may argue even foolishly, to get the car they desire.