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Started By
Message
re: Car Sales Are Slipping Into Recession-Level Decline
Posted on 6/13/19 at 3:06 pm to CarolinaGamecock99
Posted on 6/13/19 at 3:06 pm to CarolinaGamecock99
I want a new car, I just don't want to pay for a new car. It's fricking crazy to me that new Tahoe's now start out at 50k
0
Posted on 6/13/19 at 3:07 pm to Codythetiger
quote:
I've heard this explained out to me as well... but I don't understand the concept of it's "okay to have debt"
If I have the money and I'm currently in a place where I can afford a lump sum payment, why not just pay it off in full and be done with it?
Because you could put it in a high yield savings account and get 2.3% return on your money or you could pay cash on a car and get 0% return that doesn't compound. I get the debt free mentality, but when you are talking 1% you are paying a couple of hundred bucks on the life of the loan. Not only can you get guaranteed return higher than that, you have the cash flow advantage as well.
Posted on 6/13/19 at 3:08 pm to CarolinaGamecock99
Bingo. When I bought a Car two years ago literally everything new was starting at 25-28 BASE!!. With decent options you were into 30-38. Obviously factor in TTL and you push well over $40k and that’s not even for a top of the line model
This post was edited on 6/13/19 at 3:09 pm
Posted on 6/13/19 at 3:09 pm to Mingo Was His NameO
Mingo is back from ban land.
Posted on 6/13/19 at 3:09 pm to Codythetiger
quote:
If I have the money and I'm currently in a place where I can afford a lump sum payment, why not just pay it off in full and be done with it? This isn't meant as an insult question, I'm genuinely clueless why I shouldn't just pay off a vehicle i owe money on?
A dollar today is worth more than a dollar tomorrow. You take the lump sum you would have paid on the car and invest it, it should generate more than 0%. With a low interest rate you should be able to generate a higher return on your investment than the interest rate on your loan
Posted on 6/13/19 at 3:10 pm to Codythetiger
quote:
I've heard this explained out to me as well... but I don't understand the concept of it's "okay to have debt"
That is because people are trying to convince you that it is okay to pay interest. When rates are low, debtors will be bringing in less. Thus, they must convince you it's in your best interest/beneficial for you to give them money through low interest payments although you can pay it off immediately. I had a car loan once... every other vehicle I paid cash for.
Posted on 6/13/19 at 3:10 pm to CarolinaGamecock99
quote:
Are there really people taking 96 month loans?
You think cars are bad wait till you see boat loans...
Posted on 6/13/19 at 3:11 pm to TN A A Ron
quote:
That is because people are trying to convince you that it is okay to pay interest. When rates are low, debtors will be bringing in less. Thus, they must convince you it's in your best interest/beneficial for you to give them money through low interest payments although you can pay it off immediately. I had a car loan once... every other vehicle I paid cash for.
This makes absolutely no sense
Posted on 6/13/19 at 3:12 pm to 19
I blame the car salesmen, they make the entire car buying process insufferable. Cars can pretty much sell themselves now and no need for some dipshit to haggle you to the point you leave the dealership. In the salesmen spectrum, car salesmen are right there with the guys that try to sell you windshield cleaner at a service station while pumping gas.
Posted on 6/13/19 at 3:13 pm to Mingo Was His NameO
quote:
Because you could put it in a high yield savings account and get 2.3% return on your money or you could pay cash on a car and get 0% return that doesn't compound. I get the debt free mentality, but when you are talking 1% you are paying a couple of hundred bucks on the life of the loan. Not only can you get guaranteed return higher than that, you have the cash flow advantage as well.
A whopping $300 per year. I find I get a better return on my investments knowing I have nothing to worry about owing people. It is a pyschological thing. I also find my work is much more enjoyable knowing I don't have to go anymore because I don't owe anyone anything.
I just don't think you can put a price tag on freedom.
I completely get what you are saying but what I don't get is people constantly preaching this like it is the only way to wealth. That $300 per year you speak of is nothing compared to how good it feels not owing anyone shite.
Posted on 6/13/19 at 3:15 pm to CarolinaGamecock99
New vehicles are unaffordable. It’s ridiculous how much they cost
Posted on 6/13/19 at 3:16 pm to jchamil
quote:
quote:
If I have the money and I'm currently in a place where I can afford a lump sum payment, why not just pay it off in full and be done with it? This isn't meant as an insult question, I'm genuinely clueless why I shouldn't just pay off a vehicle i owe money on?
A dollar today is worth more than a dollar tomorrow. You take the lump sum you would have paid on the car and invest it, it should generate more than 0%. With a low interest rate you should be able to generate a higher return on your investment than the interest rate on your loan
But a vehicle is a liability, not an asset. A motor vehicle, except in special circumstances, will never be worth more than the purchase price. Sure, you can put enough of a down payment to keep the vehicle value slightly ahead of the depreciation schedule, but its still going to depreciate.
Posted on 6/13/19 at 3:17 pm to lsu13lsu
quote:
A whopping $300 per year. I find I get a better return on my investments knowing I have nothing to worry about owing people. It is a pyschological thing. I also find my work is much more enjoyable knowing I don't have to go anymore because I don't owe anyone anything.
I'm pretty averse to debt as well. The way I see it with my low interest car loan is I have the money to pay it off if I really had to, but since I don't I'm happy to let that money generate a little extra for me
Posted on 6/13/19 at 3:18 pm to jchamil
quote:
The way I see it with my low interest car loan is I have the money to pay it off if I really had to, but since I don't I'm happy to let that money generate a little extra for me
I see nothing wrong with your way of thinking and would never try and change your mind. Because for you, you are right. I just don't get why others think their way is the one and only way to do things successfully and preach to people about it.
Posted on 6/13/19 at 3:19 pm to CarolinaGamecock99
I will need to replace 2 vehicles in the next 2 years and everytime I look i get indigestion. Hopefully a correction is on the way because I can't justify paying today's prices for a vehicle
Posted on 6/13/19 at 3:19 pm to TN A A Ron
quote:
But a vehicle is a liability, not an asset. A motor vehicle, except in special circumstances, will never be worth more than the purchase price
I guess it's a good thing I don't treat a vehicle as an asset. This is kind of a weird reply to what I posted
Posted on 6/13/19 at 3:20 pm to lsu13lsu
quote:
A whopping $300 per year. I find I get a better return on my investments knowing I have nothing to worry about owing people. It is a pyschological thing. I also find my work is much more enjoyable knowing I don't have to go anymore because I don't owe anyone anything.
I just don't think you can put a price tag on freedom.
I completely get what you are saying but what I don't get is people constantly preaching this like it is the only way to wealth. That $300 per year you speak of is nothing compared to how good it feels not owing anyone shite.
$300 of compounding interest. And I totally get what you are saying, but when we are talking about all the transactions you make over a lifetime that miniscule amount of $300 is going to add up to several tens of thousands of dollars.
The psychology of being debt free is real, but if you are disciplined enough to be debt free you should be disciplined enough to use leverage to add tens or even hundreds of thousands of dollars to your net worth over a lifetime.
Posted on 6/13/19 at 3:21 pm to TN A A Ron
quote:
But a vehicle is a liability, not an asset.
Irrelevant to the calculation if you keep the car over the life of the loan.
Posted on 6/13/19 at 3:22 pm to Mingo Was His NameO
quote:
The psychology of being debt free is real, but if you are disciplined enough to be debt free you should be disciplined enough to use leverage to add tens or even hundreds of thousands of dollars to your net worth over a lifetime.
I don't use leverage on cash-outflowing depreciating assets like cars...ones I cannot carve out in an LLC away from my other assets.
Posted on 6/13/19 at 3:22 pm to Olric
quote:
Hopefully a correction is on the way because I can't justify paying today's prices for a vehicle
Why? In one of these threads a few months ago, I did some digging and came to the realization that a Z71 truck from 25 years ago cost roughly the same as an equivalently optioned truck today (maybe even a bit more, but I don't remember exactly), and has nowhere near the performance, capabilities, comfort, safety etc.
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