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Message
Financing car purchase using home equity
Posted on 7/31/18 at 4:21 pm
Posted on 7/31/18 at 4:21 pm
I have heard of this over the years. The idea being that one can deduct interest for the car loan. Anyone done it or have experience with the practice?
8
Posted on 7/31/18 at 5:14 pm to weagle99
So take a 5% loan and the deduct 25% of that IF you itemize instead of a 2-3% loan? Doesn't seem to make much sense to me.
Posted on 7/31/18 at 10:01 pm to weagle99
quote:
I have heard of this over the years. The idea being that one can deduct interest for the car loan. Anyone done it or have experience with the practice?
Dave Ramsey would rip you a new a-hole buddy
Posted on 8/1/18 at 1:23 pm to weagle99
When 84 months isn't long enough to afford that Yukon XL, let's go 180 months.
Posted on 8/1/18 at 2:06 pm to iknowmorethanyou
It absolutely could be done.
But if you miss a car payment, they take your house.
But if you miss a car payment, they take your house.
This post was edited on 8/1/18 at 2:07 pm
Posted on 8/1/18 at 2:21 pm to weagle99
quote:
Financing car purchase using home equity
quote:
But if you miss a car payment, they take your house.
, yeah no. This post was edited on 8/1/18 at 2:22 pm
Posted on 8/1/18 at 2:31 pm to weagle99
depends on the situation.
its easy to do for sure which is nice.
but why can't you get better financing when making car purchase.
if you're making a lesser car purchase (sub 20k) and have a very aggressive plan to pay it off fairly shortly then i don't think its a horrible idea.
2.5% financing or less or used cars can be had with good credit all day long.
its easy to do for sure which is nice.
but why can't you get better financing when making car purchase.
if you're making a lesser car purchase (sub 20k) and have a very aggressive plan to pay it off fairly shortly then i don't think its a horrible idea.
2.5% financing or less or used cars can be had with good credit all day long.
Posted on 8/1/18 at 9:29 pm to Chad504boy
Are you going to be itemizing on your taxes going forward?
It might have been a good idea in the past. But I think the opportunities to itemize for most Americans will be getting fewer and fewer going forward.
And where is everyone getting 2.5% used car loan rates today?
It's been a minute since I've looked but 4% was the best that I found.
It might have been a good idea in the past. But I think the opportunities to itemize for most Americans will be getting fewer and fewer going forward.
And where is everyone getting 2.5% used car loan rates today?
It's been a minute since I've looked but 4% was the best that I found.
Posted on 8/1/18 at 10:57 pm to meansonny
quote:
It's been a minute since I've looked but 4% was the best that I found.
I got either 3.3 or 3.4 on a pre-owned (used) Lexus back in Feb, but the wife and I both have 800+ credit scores.
Posted on 8/1/18 at 11:06 pm to EA6B
Was that through a bank? Credit union? Dealer finance?
Posted on 8/2/18 at 1:11 am to meansonny
quote:
Was that through a bank? Credit union? Dealer finance?
Dealer, was actually 3.45%
Vehicle
LEXUS RX 350
VIN
Purchase Date
Tue, February 20, 2018
Maturity Date
Mon, March 06, 2022
Original Amount Financed
APR
3.45%
This post was edited on 8/2/18 at 1:17 am
Posted on 8/2/18 at 6:57 am to Double Oh
quote:
Dave Ramsey would rip you a new a-hole buddy
Who gives a shite about what Dave Ramsey thinks?
That said, isn't a good idea
Posted on 8/2/18 at 7:17 am to weagle99
I did it. Found the exact car wife wanted and used HELOC to get quick check for the payment. Had two big commission checks coming in follow two weeks so immediately paid it off but it costed me $100 or so for the interest carried before I paid it off.
As far as carrying long term car interest on a HELOC, especially with rates going up up up, it's not smart IMO and I do not believe the interest is deductible (lender question) but even so a designated auto loan will probably be cheaper long term.
If your idea is to only pay the interest portion of the HELOC finance charges for a depreciating asset, I think that is an atrocious idea as well.
As far as carrying long term car interest on a HELOC, especially with rates going up up up, it's not smart IMO and I do not believe the interest is deductible (lender question) but even so a designated auto loan will probably be cheaper long term.
If your idea is to only pay the interest portion of the HELOC finance charges for a depreciating asset, I think that is an atrocious idea as well.
This post was edited on 8/2/18 at 7:19 am
Posted on 8/2/18 at 7:49 am to EA6B
quote:
Dealer, was actually 3.45%
Vehicle
LEXUS RX 350
VIN
Purchase Date
Tue, February 20, 2018
Maturity Date
Mon, March 06, 2022
Original Amount Financed
APR
3.45%
Thanks. I researched about 4 or 5 banks and 3 credit unions.
The only traditional dealer that I purchase through is Carmax, and their financing was competitive (3.99% with autopay) but not the best (3.75% if I switch banks and direct deposit). We settled on 3.99% with Carmax despite a few of the bank offers being slightly better with more hassle.
I haven't checked my score in about 10 years. We were over 800 then. I can't imagine we would be less than 775 (never late, and only balance ever carried is HELOC).
I may have to keep other dealerships in mind with our next purchase if we finance.
Posted on 8/2/18 at 8:11 am to meansonny
quote:
The only traditional dealer that I purchase through is Carmax
Used cars @ new car prices is the Carmax motto. Adding car loan interest to deductible mortgage interest is just plain stupid. If your finances are so bad that you deduct mortgage interest, you either live in a mansion or you are so overextended you will be in debt for the rest of your life. With a 750-800 fico score you could do much better than Carmax and 4%.
Posted on 8/2/18 at 8:28 am to randybobandy
quote:
Used cars @ new car prices is the Carmax motto
That may be so. But those prices are better than all of the regional dealerships in ATL. And after the sale, their satisfaction guarantees have spent anywhere from $500 to $1k on their dime for modifications/corrections to the vehicle (again... after the sale has been made) on my last 2 purchases. They work their asses off to make things right and bring us back for our possible next purchase. The Kohls/Costco model is a good business model and it is why Carmax has grown so much in the past 20 years in our area.
Posted on 8/2/18 at 8:30 am to randybobandy
quote:
If your finances are so bad that you deduct mortgage interest
I'm pretty confident in saying that almost every homeowner with a mortgage deducts the interest in the past. I can't agree with your sentiment.
Going forward, you may be correct. This is everyone's first rodeo with this new tax plan. We will have to see how it shakes out.
Posted on 8/2/18 at 8:58 am to randybobandy
quote:
If your finances are so bad that you deduct mortgage interest, you either live in a mansion or you are so overextended you will be in debt for the rest of your life
What an ignorant statement. Going forward, many more people will be taking the standard deduction, but people that live in 200k homes were taking mortgage deductions until now. The payment on a 200k house is less than rent in most places. Go back to listening to Dave Ramsey.
Posted on 8/2/18 at 9:14 am to meansonny
quote:
And where is everyone getting 2.5% used car loan rates today?
was through dealer with capital one. i told him it was 2.5% financing or i'm walking. he hit the keyboard very pissy and WallAh... 2.5 % financing appeared.
Posted on 8/2/18 at 9:48 am to Chad504boy
I've never shooped "dealer financing before".
I get about 6 quotes going in and compare with the dealer once I get there. Some companies, I don't expect them to be competitive because the borrowers flock to them (BOA, Carmax). I was impressed that Carmax was as good as I found it. BOA was much worse.
When shopping for cars from dealers, are you shopping the financing on the website ahead of time? Are you quoting though multiple dealerships? Or just haggling the financing at the end of the process?
I get about 6 quotes going in and compare with the dealer once I get there. Some companies, I don't expect them to be competitive because the borrowers flock to them (BOA, Carmax). I was impressed that Carmax was as good as I found it. BOA was much worse.
When shopping for cars from dealers, are you shopping the financing on the website ahead of time? Are you quoting though multiple dealerships? Or just haggling the financing at the end of the process?
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