Who likes car payments?

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I'm strongly opposed to borrowing money and apart from my mortgage I never have.

It comes down to two factors:
wanting to stand on my own feet without asking for help,
And,
I saw a colleague paralysed in an industrial accident and have to declare bankruptcy because he couldn't pay the mortgage, credit card, loan, car or any other number of payments.

That I hate paying interest, or an unnecessarily inflated price is immaterial. We have means and should strive to live within them.
 
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I agree with his advice lower to mid income. Upper income who cares.

If you buy vehicles that depreciate well his advice actually works as a friend followed it over the years.
 
Your friend who had the accident..... Could he have made it with only a mortgage payment?? Plus other regular expenses like food, power bill, water etc?? If he went from higher income to no income than he had no chance obviously. If he went from good income level to disability then he didn't have much of a chance either... Not much money there to be honest. Very sad.
 
I don't know exactly how much he earned, but he supported himself and his wife, along with their two kids. A big house in a nice area, two BMWs, children in private school, two holidays a year etc. He certainly didn't struggle for money until he couldn't work and so couldn't earn.
They had to sell everything, move into state subsidised housing and put their kids in a regular school, and AFAIK the majority of their income is now state benefits although the wife works a few hours at the supermarket checkout to help make ends meet.

I believe in free choice, so I try to let people do what they want as much as possible, but to this day I strongly believe that if he saved all that money by living in a modest house, not going on holiday, owing used cars etc he would have had enough of a margin to support the family while they adapted to change.

Confirmation bias is always there, but I spent my life thinking 'I need to save I case something happens' then I see something happen to someone with no savings and in my mind that means I was right all along in only paying cash and only when I could afford to do so.
 
Originally Posted By: dareo
That was entertaining. My real world example: Bought '14 accord sport MT for the wife, $22,000 (not including taxes, ect) at 0.90 percent. Paid it off in 2 years, spent about 200 in interest. Honda offered $500 to finance through them. So i gained money financing it, and the car would probably still sell for 19k private party. Two years and 23k miles later it has lost about 15% since people pay crazy money for used hondas. The video says i would have lost 25% that night! 70% value lost at 4 years? Yeah right. 2011 Accords are still about 13k or over 50% of new. A 2012 model year jumps to about 65% value. 2016 models are about to come out so you have to decide if a 4 year comp is fair to say 2011 or 2012.


We bought a new car to drive it for its entire lifespan. Why pay 6k for a car that has most of its lifespan consumed? In the Honda Accord space $6k gets you some old beater with 150k+ miles on it already and no modern tech.

The cars i drive are all old and worth about 3-5k each because i like old cars, german cars, stuff like that. My 540 sport wagon cost me $3250.00 yet stickered for 50-60k in 2000. Would i buy a new BMW? no way.

Normal people just Buy, Consume, Repeat. Buying new is smart if you have the money and will really use the vehicle for at least 10 years.


we now drive our rides forever, 10 year old buick and a 2010 truck, no more new rides for us, learned the hard way. I got many friends in the car repair business, I do not work on shxxet now, one gets old, fingers, back, and patience grow thin..lol, ok, I do put air in the tires,lol. I do like your response..
 
Originally Posted By: Vuflanovsky
Originally Posted By: doitmyself
What would BITOG be if we didn't have a weekly outlet to beat our chests. LOL

We must be the best people on earth. Let's give ourselves a hand. No debt. No TV. No leases. No fast food. No soda. No photo bombs. Definitely no new cars. What did I miss?

1324316156_baby_gorilla_chest_pond_fail.gif



Judging by this thread...probably no sex.
We are going by the rules in here: They said no sex, no politics, no bad words,,,wow ,you think everyone in here is going by that,lmaorof.................its the weekend...
 
Originally Posted By: hatt
Originally Posted By: dareo
94% make poor credit choices? Do you have any sources to back that up? Cause it looks like to me 37% of the population is at a 750 to 850 fico score for the 2013 calendar year. You don't get that high by having big balances, lots of inquiries, and certainly not any derogatory events.

Using the same data 34.2 % fell below 649. To me that says one in 3 is very smart with credit, one in 3 is very bad with it, and the other guy is just ok.
You can't go by credit scores to figure out how good someone is with money. Plenty of those with 750s are up to their eyeballs in debt. While people that don't use or need credit are going to have lower scores.


I would like to get more data on it. Where was that statistic published? And why does the responder believe that 750 credit score does not mean anything?
 
Source FICO, posted on http://www.cardhub.com/edu/average-credit-scores/

The fact that many people use no credit ever does not demonstrate they are smart with credit. Having a credit history and a good score can easily be done by getting one credit card and using it once a month on one purchase and paying that off.

You want insurance, apartments, jobs, almost anything anymore? They check your credit. No credit or bad credit = you pay more or possibly don't get hired or leased to.

My newborn son is getting a credit card as soon as i can so he has long term credit history. My credit history being shorter is the only thing keeping me out of the 800s.

I've never paid a cent of credit card interest. I'm not special or high income i just have always been very good with my money.

I should add, i run most of my spending and bills through a capital one card and get 1.5% cash rebates on it all. They have paid me tons over the years and i have not paid them a cent of interest.
 
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Originally Posted By: Mr Nice
With 0.9% financing or zero % its wise to finance.
I would research that statement ,imho. I have a good friend who owns a chevy dealership, I just might call him and ask him about that. He does finance and insurance there , could be a good source ..
 
Many car deals you end up losing discount if you take the 0% or .90 rates. You have to carefully calculate what is better for each situation. Honda just likes to give out free money and then bribe you to take it.
 
Dave Ramsey, at the end of 2nd video: "If you didn't write a check, by the way, to buy the whole friggin' car you couldn't afford it!"

That's insane. I agree with him about all the high interest car buyers.People who can get good low interest loans and have plenty of debt to income ratio to pay for them it is perfectly ok to finance a car they either need or want.

If you have to pay 5% or higher you should get a beater and fix your credit first.
 
Originally Posted By: CourierDriver
Originally Posted By: Mr Nice
With 0.9% financing or zero % its wise to finance.
I would research that statement ,imho. I have a good friend who owns a chevy dealership, I just might call him and ask him about that. He does finance and insurance there , could be a good source ..


Ally currently has a Money Market Account paying .85%. I can't think of any scenario where it would be smart to withdraw that money and dump it into the purchase of a car. The small price you would pay on interest from the loan and tax from the interest on the savings account is far outweighed by the flexibility you have with those funds being liquid.

Even smarter would be to invest those funds in a brokerage account and let it grow while you're borrowing money for almost nothing!
 
Originally Posted By: dareo
Dave Ramsey, at the end of 2nd video: "If you didn't write a check, by the way, to buy the whole friggin' car you couldn't afford it!"

That's insane. I agree with him about all the high interest car buyers.People who can get good low interest loans and have plenty of debt to income ratio to pay for them it is perfectly ok to finance a car they either need or want.

If you have to pay 5% or higher you should get a beater and fix your credit first.


My stepfather financed his new 300. He's paying, IIRC, 1.5% interest. The cash he could have paid is making more than that.
 
You get what you pay for. If you buy a brand new car you pay new car price. If you buy a car for half price it has half its life left. This is assuming that you don't get all those bell and whistles, TVs, navigation, power seats or whatever they throw in cars now. Just buy a base model car. Also, used cars are not nearly the same good deal they were many years ago. I remember when a $3500 car could last you 4-5 relatively trouble free years. Anyone paying 9.6% interest on a car loan needs their head examined.

The best thing you can do if you buy a new car is to drive it until it dies. Flipping cars is what hurts you financially.
 
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No matter how you cut the dice if you have a car you have a payment.
When new your payment is made to the creditor,as they age and wear your payment is made to the mechanic. Or the parts house.
There is no free lunch. When buying used one must look at the empirical data of that particular model and establish if the miles driven equate to the cost of the car up front,and the cost of fixing the various systems.
Buying new will mean all variables such as driving habits and maintenance habits are a known value. Buying used one must dig deeper.
 
Originally Posted By: GMFan
You get what you pay for. If you buy a brand new car you pay new car price. If you buy a car for half price it has half its life left.


Pablum.
 
Originally Posted By: Jarlaxle
Originally Posted By: GMFan
You get what you pay for. If you buy a brand new car you pay new car price. If you buy a car for half price it has half its life left.


Pablum.


Nah, I think GMFan is pretty on the mark.
 
Originally Posted By: dishdude
Originally Posted By: Jarlaxle
Originally Posted By: GMFan
You get what you pay for. If you buy a brand new car you pay new car price. If you buy a car for half price it has half its life left.


Pablum.


Nah, I think GMFan is pretty on the mark.



Not really.

Vehicles depreciate with time and miles. You can find beautifully maintained older vehicles with low miles for the year but the price will reflect what the market will bear,not what the vehicle may actually be worth.
For example let's say I have a 2004 Dodge Ram with 100000 miles. That truck on its best day is a 6000 dollar truck. Which is a fraction of its new value.
Now compare that to a 2008 Dodge Ram identically optioned with 150000 miles. The 08 is worth more vs the 04 however the 04 is less worn.
And I can find this type of situation every time I go shopping.
Which totally blows gmfan's hypothesis


And getting back to the payment topic financing at less than 3% is smart spending. Inflation means the dollars I spend on my last payment are worth less than the dollars spent on the first one. So paying cash up front is actually dumb because once you factor in the various money markets the value of the dollar spent equates to paying more for the item when paying up front vs payments on a low interest loan.
So while I do agree for the most part with no payments there are situations where financing will save you money vs writing a cheque for the entire amount.
 
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