Hey all I have a question.

I'm analysing some financials for a pending deal. This guy is listing all of his assets (personal as well).....apparently he is something of a car collector (I cant get into details but its a sick collection) but something doesnt seem right; he'll have like 2 and three of the same car/same year (I'm guessing they are different colours it doesnt say)..one will even be free and clear and the other is carrying debt.

Does this make sense? because its not making sense to me why one would get two of the exact same thing and even pay interest in the process....is it a "richie" thing to waste your cash???

im guessing he's got some sort of tax advantage where he ends up ahead even after interest payments. (not familiar with canadian tax law, but that'd make sense here)

I think he might, or he probably is a seller.

I'm no expert but if i had ridiculous amount of money to blow i might buy multiples of a car that i really like for a couple reasons.

1. have a daily driver and also a track car

2. one to use and one to stick in a garage as a collectors item.

3. One to be bale to use and one to do crazy modifications to the possibility of blowing it up ... forced injection on a Renesis motor.

Also on paper these car may look different, model/year. But due to different modifications they may be completely different. A 2004 stock rx8 and 2004 20b swap rx8(drool ...).

I'm not a car collector but thats what i came up with.

Maybe there is interest on a car in one of these cases because instead of simply paying for the car outright he can keep that money stick it in an investment and make the necessary payments. The investment he gets would be higher than the loan and by the end of the loan he will have more money including interest than if he simply bought the car in the first place. Especially when interest rates were really low a few years back. If you can get a loan at 4% and an investment at 6% why pay for the car, put it in the investment. At the end of the loan you'll have the interest of 2% plus the car you bought.

I don't know about Canadian tax law but you can't deduct auto loan interest in the US. And you can only deduct car payments if used for a business, if he was a seller then that would be the case.

This person is actually an Amercian

Im with feras, Interest is deductable. Probably using it as a tax advantage

Im with feras, Interest is deductable. Probably using it as a tax advantage

If its for personal use auto loan interest is NOT tax deductible. I thought that it was too until i sat down and did my taxes for last year.

"You cannot deduct personal interest. Personal interest includes interest paid on a loan to purchase a car for personal use, credit card and installment interest incurred for personal expenses." Take from the IRS website for Topic 505 (http://www.irs.gov/taxtopics/tc505.html) .

"If you're an employee, interest on a personal auto loan is not a deductible expense, even if you use the car only for business purposes.
However, if you're self-employed, you can deduct the part of the interest that represents business use of your vehicle"
This info from this page is not a government based page so i don't know how accurate or current all of this information is, but it still gives pointers on car deductibles and being self employed. Auto Deductions (http://www.selfemployedweb.com/auto-deduction.htm)

if i was rich id set up a couple LLC holding companies for my assets and debts. Im guessing that could be the case here.

if i was rich id set up a couple LLC holding companies for my assets and debts. Im guessing that could be the case here.


If i was rich i would do a lot of things :D:

I was rich i'd be high right now.

Some of the cars might have a story behind them -"Owned by Bonnie and Clyde", Won the Indi 500 in 1966

Or he might consider them investment items - something that will grow in value and can be sold at a higher price - like you would antique furniture...
Or maybe he is just really likes the car and wants a complete set - like all the colors for a 57 Chevy...

Or he's scamming you and will soon ask for your bank account information so he can make a large transfer for you to hold onto for him.