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re: Bad Time to Invest in a New Vehicle
Posted on 2/25/09 at 4:36 pm to tigerclaws15
Posted on 2/25/09 at 4:36 pm to tigerclaws15
quote:
I guess you can buy a 300k home straight cash.
do you seriously not understand the difference between a house as an asset versus a car as an asset? It's reasonable to lever up to buy a house. It's NEVER reasonable to lever up for the purchase of a car.
2
Posted on 2/25/09 at 4:44 pm to Colonel Hapablap
Never is a strong word.
Posted on 2/25/09 at 4:46 pm to kfizzle85
you remember that hyperbole thing, right?
Posted on 2/25/09 at 4:46 pm to Colonel Hapablap
:boom: 
Posted on 2/25/09 at 4:46 pm to LSUZombie
quote:
knew you wouldn't have a response to this. how about you just accept the fact that not everyone has $30,000 in the bank to buy a car.
Especially those who overextend themselves early in life....I'd be willing to bet you NEVER have 30,000 sitting in a bank (other than retirement accounts) unless you win the lottery or get an inheritance.
quote:
i'm only 25, not many people my age have anywhere near that in the bank
Why not? Most have car payments....charge up their best buy cards all the time..duh..that's why. Face it, your plan is foolish.
quote:
i agree with you that a lot of people finance things they can't afford and have to right to buy, but a lot of people can afford those things, they just can't put all the money up front.
It's hard to understand when you are young (I've got a decade on ya) but there is a risk associated with credit. You are putting yourself at risk and hampering your ability to build wealth by using credit to by stupid shite, like cars.
quote:
you don't have to be a douche about it
Just stating my opinions on the matter, just like you are, it's just that mine bother you because you know it's true.
It's a cyclical thing. If you save that money for the first good car and then make payments to yourself every month (eventhough you already paid for the car). Then you'll always have money in the bank for a car. And you spend less on it..because it'll hurt more.
Or you can follow your plan and you'll likely ALWAYS have a car "note".
This post was edited on 2/25/09 at 4:49 pm
Posted on 2/25/09 at 4:46 pm to Colonel Hapablap
CH, serious question about the statement about car dealerships caring more about a substantial down payment more than a credit score. you really believe that?
I'm kind of disappointed that you would try to throw me under the bus by starting that thread on the OT about credit score, but in all honesty I have absolutely no credit that I know of because I've never owned one or been tempted to own a credit card.
Will a down payment of 30-40% cause a dealership to neglect my credit score?
Edit: i realize CH was speaking of houses not vehicles., but still. -thanks NOMT
I'm kind of disappointed that you would try to throw me under the bus by starting that thread on the OT about credit score, but in all honesty I have absolutely no credit that I know of because I've never owned one or been tempted to own a credit card.
Will a down payment of 30-40% cause a dealership to neglect my credit score?
Edit: i realize CH was speaking of houses not vehicles., but still. -thanks NOMT
This post was edited on 2/25/09 at 4:50 pm
Posted on 2/25/09 at 4:48 pm to Klark Kent
quote:
CH, serious question about the statement about car dealerships caring more about a substantial down payment more than a credit score. you really believe that?
Will a down payment of 30-40% cause a dealership to neglect my credit score?
Don't want to speak for CH, but I believe he was referring to a down payment of 20% towards the purchase of a house.
Posted on 2/25/09 at 4:49 pm to dawgorama
Its a question of opportunity cost, and that's it. You guys get feisty over this stuff huh.
Posted on 2/25/09 at 4:50 pm to Klark Kent
I was referring to house purchase. Car dealers will frick you blind in any way that you'll let them.
as far as the OT thing, we frick with people here. It's what we do. Don't take it personally. I'd do the same thing to any of these tards. In fact, I probably have.
as far as the OT thing, we frick with people here. It's what we do. Don't take it personally. I'd do the same thing to any of these tards. In fact, I probably have.
Posted on 2/25/09 at 4:51 pm to kfizzle85
quote:
Its a question of opportunity cost, and that's it. You guys get feisty over this stuff huh.
It's just damned bizzare to me. No one seems to understand that one can save money and actually pay cash for a decent car (I'd never spend 30K on one like the OP wanted). You don't have to be rich to do it..you just have to not get caught in the "car note" cycle or if you are get out of it.
Posted on 2/25/09 at 4:54 pm to kfizzle85
quote:
Its a question of opportunity cost, and that's it
I completely agree with this. If one is making more on his non-risky investments than he would pay on a car loan, the car loan makes sense. While this may happen sometimes, it's usually a result of the interest cost being lumped into the "price" of the car. Like I said, car dealers exist for the sole purpose of getting as many of their dicks into as many of your orifices as they can.
Posted on 2/25/09 at 4:57 pm to dawgorama
All I was suggesting is that the interest rate you choose to pay (at least in these types of transactions) is purely a function of your opportunity cost, at least on your side of the ledger.
Posted on 2/25/09 at 4:58 pm to Colonel Hapablap
Yeah I'm with you on that Col.
Posted on 2/25/09 at 4:58 pm to kfizzle85
I would submit that if you negotiate the price of the car under the assumption of a cash payment and then try to finance it, you will always be paying more than you can make (risk free).
Posted on 2/25/09 at 4:59 pm to kfizzle85
For the record I will go ahead and suggest that I will probably never have $30,000 in cash in the bank at any point in my life, and that will be by design.
Posted on 2/25/09 at 5:01 pm to Colonel Hapablap
Absolutely, no question about it. I'm not commenting on fairness or whether its a "good deal," so to speak, just that there isn't anything inherently wrong about financing anything, as long as you can recognize and properly reconcile the cost with whatever goal it is you are trying to attain.
Posted on 2/25/09 at 5:01 pm to kfizzle85
I've never paid a car note. I bought my first car at 16 for 900 cash from my savings. I continued to buy used cars for cash until I could afford my first new car at age 22. The reason I could afford to pay cash was because of the savings I had accumulated from not paying interest on loans starting at age 16.
Posted on 2/25/09 at 5:02 pm to kfizzle85
however, I also think that you ought to HAVE the money, even if you don't use it. If you only have $100 in your savings account, I don't give a shite what your cost of capital is.
Posted on 2/25/09 at 5:05 pm to dawgorama
Here's my two cents...
The guy originally asked if the MT board thought this was a good time to "invest" in a new vehicle.
I think CH et al already covered well the need to stop thinking of a vehicle as an "investment".
The other issue is that KlarkKent obviously will have to finance a large part of the $25-30k he wants to spend since he mentions a $500/mo note.
Klark - IMO it's not a question of whether or not you "can afford it". I don't know your salary, so I'll take your word for it that you can.
The actual question you should consider is whether or not it's a good long-term financial decision to finance this vehicle versus purchasing a good, late model used vehicle, pay more towards the purchase price, and finance less.
I'm still a (relatively) young guy, so I remember the days of thinking that it's okay to finance one thing after the other. I can tell you NOW that there is no better feeling in the world than having enough cash saved up in the bank to be able to have compounding interest work FOR you instead of AGAINST you.
The sooner you reach that financial summit, the more wealth you will accumulate. I was lucky...I made a ton of stupid decisions while in med school thinking "Hey, I'll just pay it all off once I'm finished and making good money". I am fortunate that I make enough that I was able to get out from under the mountain of debt I had, but it took 2 years of not buying anything. Not everyone has such a huge jump in income, and some of my friends making well into six-figures are literally drowning in debt because they thought it was a great idea to buy BMWs, Infinitis, etc as well as a big house as soon as they were finished despite no money in the bank. It's a sinking feeling, and I never want to experience it again.
Sorry for the long post, but my simple advice to you would be to consider the long-term benefit of putting away cash while young in exchange for putting off getting the car you really want for a few years. If you make decent money like you indicated, that's all it may take.
Good luck.
The guy originally asked if the MT board thought this was a good time to "invest" in a new vehicle.
I think CH et al already covered well the need to stop thinking of a vehicle as an "investment".
The other issue is that KlarkKent obviously will have to finance a large part of the $25-30k he wants to spend since he mentions a $500/mo note.
Klark - IMO it's not a question of whether or not you "can afford it". I don't know your salary, so I'll take your word for it that you can.
The actual question you should consider is whether or not it's a good long-term financial decision to finance this vehicle versus purchasing a good, late model used vehicle, pay more towards the purchase price, and finance less.
I'm still a (relatively) young guy, so I remember the days of thinking that it's okay to finance one thing after the other. I can tell you NOW that there is no better feeling in the world than having enough cash saved up in the bank to be able to have compounding interest work FOR you instead of AGAINST you.
The sooner you reach that financial summit, the more wealth you will accumulate. I was lucky...I made a ton of stupid decisions while in med school thinking "Hey, I'll just pay it all off once I'm finished and making good money". I am fortunate that I make enough that I was able to get out from under the mountain of debt I had, but it took 2 years of not buying anything. Not everyone has such a huge jump in income, and some of my friends making well into six-figures are literally drowning in debt because they thought it was a great idea to buy BMWs, Infinitis, etc as well as a big house as soon as they were finished despite no money in the bank. It's a sinking feeling, and I never want to experience it again.
Sorry for the long post, but my simple advice to you would be to consider the long-term benefit of putting away cash while young in exchange for putting off getting the car you really want for a few years. If you make decent money like you indicated, that's all it may take.
Good luck.
Posted on 2/25/09 at 5:05 pm to Colonel Hapablap
Word to that, an underlying assumption of mine as well.
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