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re: Is it super dumb to finance a vehicle for 72 months?
Posted on 3/3/17 at 1:28 pm to LSUengineer12
Posted on 3/3/17 at 1:28 pm to LSUengineer12
Let's assume for the sake of argument that we consider financing a vehicle (paying for a depreciating asset with borrowed money, with interest - however nominal) a necessary evil.
The min/maxers will come in here and say, "I can invest the payment and make money on it idiot" blah, blah, blah.
In every...single...case - vehicle financing costs you money in depreciation, period. 72-month is particularly subversive because it allows the folks who right ought to be in a $7500 beater to drive a $50k car because they can "afford" the payments. So, they pay $700 a month for 6 years instead of 1 year.
Pay as much as you can afford down, and finance for as short a period as you can, even if it hurts. Why? Because it's super dumb to do otherwise.
The min/maxers will come in here and say, "I can invest the payment and make money on it idiot" blah, blah, blah.
In every...single...case - vehicle financing costs you money in depreciation, period. 72-month is particularly subversive because it allows the folks who right ought to be in a $7500 beater to drive a $50k car because they can "afford" the payments. So, they pay $700 a month for 6 years instead of 1 year.
Pay as much as you can afford down, and finance for as short a period as you can, even if it hurts. Why? Because it's super dumb to do otherwise.
1
Posted on 3/3/17 at 2:16 pm to Ace Midnight
quote:
In every...single...case - vehicle financing costs you money in depreciation, period. 72-month is particularly subversive because it allows the folks who right ought to be in a $7500 beater to drive a $50k car because they can "afford" the payments. So, they pay $700 a month for 6 years instead of 1 year.
I think every person who has said they would stretch it out has also said it can't be used to buy more car than you can afford.
If you can only afford a 7500 beater, this is NOT something you can consider.
But if I can use my money all up front to pay for a 30K car, or I can use someone else's money at a rate less than inflation, why would I not at least consider it?
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