- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Your thoughts on car payments and such
Posted on 2/8/16 at 9:31 am
Posted on 2/8/16 at 9:31 am
Looking around the internet you'd swear that buying a new car and financing is the worst thing you could do. The consensus among the "financial guys" is to save cash and buy an older car.
Along with these suggestions though typically come the assumptions that you'll pay 7% on a new note, cars depreciate 35% the first year, 70% over 4 years, you'll buy a new "new" car once the note is done, when you're saving for a new car, you'll make 12% on those savings, etc.
A lot of this seems a bit over done to me. How is it unreasonable to buy a new car that you can "afford" (I know this somewhat depends on your viewpoint of finances), if you can finance for <3% and drive it for 12 years? I could technically buy a nice used car, or hell even a pretty nice new car right now with cash. Would this money not be better in the stock market, as opposed to avoiding car interest?
Along with these suggestions though typically come the assumptions that you'll pay 7% on a new note, cars depreciate 35% the first year, 70% over 4 years, you'll buy a new "new" car once the note is done, when you're saving for a new car, you'll make 12% on those savings, etc.
A lot of this seems a bit over done to me. How is it unreasonable to buy a new car that you can "afford" (I know this somewhat depends on your viewpoint of finances), if you can finance for <3% and drive it for 12 years? I could technically buy a nice used car, or hell even a pretty nice new car right now with cash. Would this money not be better in the stock market, as opposed to avoiding car interest?
14
Posted on 2/8/16 at 9:38 am to jimbeam
Used cars arent as great of a value as they used to be anymore. New cars usually come with great incentives, rebates, and warranties. If you are planning on driving something for 12 years, I personally would buy new. Peace of mind knowing that I can take care of the vehicle myself along with extremely low interest rates is worth it to me.
Posted on 2/8/16 at 9:41 am to jimbeam
Right now, you can get money for pretty cheap when purchasing a car. Of course it will do better in the stock market (long term), but you gotta enjoy life a bit too right?
I think if you can put a decent amount of cash down on a new car, and you know you're going to drive it for a decade, a doable payment for 48 months is fine.
I think if you can put a decent amount of cash down on a new car, and you know you're going to drive it for a decade, a doable payment for 48 months is fine.
This post was edited on 2/8/16 at 9:42 am
Posted on 2/8/16 at 9:44 am to jimbeam
I hate car payments. Absolutely hate them.
I will always put as much down as possible and finance for as short as possible.
And in my case, new is almost always a "better" deal simply when it comes to financing and rebates.
I put half down on my wife's car and financed at 0% for 5 years, but I'll pay it off way before then.
I will always put as much down as possible and finance for as short as possible.
And in my case, new is almost always a "better" deal simply when it comes to financing and rebates.
I put half down on my wife's car and financed at 0% for 5 years, but I'll pay it off way before then.
Posted on 2/8/16 at 9:49 am to Salmon
With rates below 2%, i put as little as possible down and finance for 5 years. We just bought a new highlander and will pay about $2100 in interest over 5 years.
Posted on 2/8/16 at 9:51 am to jimbeam
Having a warranty for four years while I pay for the car with a very low interest rate is better for me personally than buying an older car and having to bear the expense of certain repairs that are currently under warranty. I put a lot down when I do purchase a car so I'm always above water on it. People are going to be different. I like the comfort of having modern technology in my car.
Posted on 2/8/16 at 10:11 am to Salmon
quote:
I hate car payments. Absolutely hate them.
This. One of the keys to building wealth is not having a car payment.
Posted on 2/8/16 at 10:12 am to jimbeam
quote:
buy a new car that you can "afford"
I bought a Hyundai Sonata and the fiance bought a 3YO Lexus IS250 used. I have better features, more space, better gas mileage and have 20k miles on it. She drives a 4 YO car with 75,000 miles, cruddy bluetooth and will have to spend a boatload to repair it soon I'm sure.
Face the hard truth, ask yourself "Would I spend $X dollars per month on this feature?" or "Would I spend $Y dollars for the privilege of telling others the brand of my car?"
Posted on 2/8/16 at 10:21 am to Salmon
quote:
I put half down on my wife's car and financed at 0% for 5 years, but I'll pay it off way before then.
Because you hate car payments that much? That's a lot of hate.
We're all different... we all have different comfort levels. But I'd put the money in a 1% online savings account before I'd ever pay off a 0% loan early. I don't know what you paid for the car (versus what it would have cost if you'd paid all cash), but that's a d@mn good financing deal.
Posted on 2/8/16 at 10:24 am to Vandyrone
IDNGAF because I really like cars. Wayy more than transportation to me. My only hobby. Sometimes I pay cash, sometimes I finance a bit depending on what I have going on at the time. Fortunately I have a really good income and it's still a small portion and all my investment needs are met.
Posted on 2/8/16 at 10:57 am to jimbeam
The question you have to ask yourself is this:
"Have I ever driven a car for 12 years?"
If you have never done it before, you wont do it now.
I get sick of cars in 1-2 years maximum nowadays. To buy a car that is less than 5-6 years old would be stupid of me. I would lose a ton in depreciation.
"Have I ever driven a car for 12 years?"
If you have never done it before, you wont do it now.
I get sick of cars in 1-2 years maximum nowadays. To buy a car that is less than 5-6 years old would be stupid of me. I would lose a ton in depreciation.
Posted on 2/8/16 at 12:06 pm to SECdragonmaster
quote:
I get sick of cars in 1-2 years maximum nowadays. To buy a car that is less than 5-6 years old would be stupid of me. I would lose a ton in depreciation.
You buy old cars and change them every couple of years? That's a strange practice
Posted on 2/8/16 at 12:10 pm to SECdragonmaster
quote:
"Have I ever driven a car for 12 years?" If you have never done it before, you wont do it now.
True. People say that a lot but unless it is out of necessity, I don't think a lot people are driving cars for 12 years.
Posted on 2/8/16 at 12:36 pm to lynxcat
quote:
You buy old cars and change them every couple of years? That's a strange practice
Yes I do.
But I change the type completely.
Luxury sedan then Sporty Import then Vintage Jeep then SUV then Convertible German car, etc.
The list goes on.
Posted on 2/8/16 at 2:28 pm to jimbeam
I only buy new, but I keep em for 10-12 years. So I don't mind a 36 mo, very low interest loan. I can think of countless places I would like to see/visit rather than drive a newer car.
Posted on 2/8/16 at 2:45 pm to Vandyrone
quote:
This. One of the keys to building wealth is not having a car payment.
This. I never had a car payment in my life. I bought my first car at age 16 for 600 bucks. I saved the money that would have been a note until I could buy a nicer used car for 1500 when I was 19. I continued this trend until I could buy a cheap new car at age 22.
Over the last 50 years I've probably saved 100K on interest by never financing a car. I currently drive a 3 year old Lexus and a new Buick.
Posted on 2/8/16 at 3:13 pm to jimbeam
quote:
cars depreciate 35% the first year, 70% over 4 years,
Oh bullshite.
quote:
if you can finance for <3% and drive it for 12 years?
This is what I kind of do.
Tried to buy a good used truck a few years back and they were just holding their value way to much. It didn't make sense to buy used with the models I was looking at.
Posted on 2/8/16 at 3:23 pm to Zach
quote:
This. I never had a car payment in my life. I bought my first car at age 16 for 600 bucks. I saved the money that would have been a note until I could buy a nicer used car for 1500 when I was 19. I continued this trend until I could buy a cheap new car at age 22.
Over the last 50 years I've probably saved 100K on interest by never financing a car. I currently drive a 3 year old Lexus and a new Buick.
But you probably missed out on earning much more in investment gains.
The money that you save could be invested instead and earn higher interest than what you pay for a note.
Right now you can get financing for less than 2% for 5-6 years. That's basically the same thing as saving money. Your money is better invested in the market, where it is very likely to beat 2% over 5 years.
Posted on 2/8/16 at 3:52 pm to Vandyrone
quote:
One of the keys to building wealth is not having a car payment
No it isnt
Posted on 2/8/16 at 4:25 pm to Delacroix
I just bought a car and put the minimum down that I could ($300) and extended the term for as long as possible (72 months) because I got a 3.2% interest rate. Now, will I throw some extra money at the note here and there? Maybe. But I value a 401k tax deduction, or savings to avoid PMI on a future house note, more than I value the 3.2% opportunity cost.
Page 1 of 3
Popular
Back to top
Follow TigerDroppings for LSU Football News