Help me make sense of financing
Hi, I'm embarrassed to admit that I'm confused about best way to structure my financing deal, asking for the wisdom of who has done it before here (I am sure many have). I paid cash for my curre...
Forum Discussion
Guys, thanks for the advice (even though I wasn't soliciting most of it).
I'm aware of the depreciation curve, and I am comfortable with financing as an option to acquisition.
I redid my analysis and saw what I was missing: the difference in monthly payment between the two scenarios. The principal reduction approach comes with about a $100 more higher monthly payment, which is why my payoff at 48 months is better in that scenario. But I pay for that equity either way.
Since, in worst case, I can sell my current rig privately for $13.5k and come out about the same at 48 months, regardless of the tax liability reduction, I think I am going to roll the dice and wait til spring and sell it privately when the market (literally) heats back up, and I should be able to sell it for significantly more than $13.5k.
Because I paid cash for my old rig, I have the option to wait and sell. Should I have financed it, it would be more difficult to pull that off.
I'm aware of the depreciation curve, and I am comfortable with financing as an option to acquisition.
I redid my analysis and saw what I was missing: the difference in monthly payment between the two scenarios. The principal reduction approach comes with about a $100 more higher monthly payment, which is why my payoff at 48 months is better in that scenario. But I pay for that equity either way.
Since, in worst case, I can sell my current rig privately for $13.5k and come out about the same at 48 months, regardless of the tax liability reduction, I think I am going to roll the dice and wait til spring and sell it privately when the market (literally) heats back up, and I should be able to sell it for significantly more than $13.5k.
Because I paid cash for my old rig, I have the option to wait and sell. Should I have financed it, it would be more difficult to pull that off.
