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Do you make a car payment??? Details please!

Posted By: Imp4

Do you make a car payment??? Details please! - 03/08/19 02:10 AM

OK, so as part of my quest to replace my long overdue current ride, I've made my way through several models that interest me.
I'm down to one or two that I'll likely choose from over the next few months.

That brings us to the monthly payment.
I'm in a spot where I can make a reasonable down payment but I'll still need to finance about $15,000 for the car.
Based on a roughly 4% interest loan this brings me to 36, 48 and 60 month loan payments of $443, $339, or $276 per month respectively.

Each of these are within my monthly budget, but the painfully frugal side of me just winces at the notion of a car payment.
I try to soothe my soul by telling myself that plenty of folks out there make car payments every month, but I still sit there and wonder just how much regular people pay.

So I am opening it up to the BITOG masses...

For those of you that make a monthly car payment, how much do you pay?
How long is your loan?
How many payments do you have left???

Given the choice, would you sign yourself up for the same loan terms and conditions again?

Thanks in advance!!!
Posted By: JohnnyJohnson

Re: Do you make a car payment??? Details please! - 03/08/19 02:13 AM

Yes both my vehicles a 2004 Corolla and my 2006 Duramax I made one payment on.
Posted By: aquariuscsm

Re: Do you make a car payment??? Details please! - 03/08/19 02:14 AM

I made one payment on my 300ZX and the next month I paid it off.
Posted By: eljefino

Re: Do you make a car payment??? Details please! - 03/08/19 02:14 AM

Originally Posted by JohnnyJohnson
Yes both my vehicles a 2004 Corolla and my 2006 Duramax I made one payment on.


Beat me to the joke.
Posted By: maverickfhs

Re: Do you make a car payment??? Details please! - 03/08/19 02:21 AM

Originally Posted by eljefino
Originally Posted by JohnnyJohnson
Yes both my vehicles a 2004 Corolla and my 2006 Duramax I made one payment on.


Beat me to the joke.

+3 thumbsup
Posted By: BMWTurboDzl

Re: Do you make a car payment??? Details please! - 03/08/19 02:35 AM

Inflation (Official): 2 percent
Inflation (Unofficial via Shadowstats): ~5 percent.

Help you decide your real cost of financing.
Posted By: OILJUNKIE

Re: Do you make a car payment??? Details please! - 03/08/19 02:38 AM

Save the money pay cash for the vehicle. By the time you save the money you will not want to spend it on A car. I have not had A car payment since 1986.
Posted By: Imp4

Re: Do you make a car payment??? Details please! - 03/08/19 02:43 AM

Originally Posted by BMWTurboDzl
Inflation (Official): 2 percent
Inflation (Unofficial via Shadowstats): ~5 percent.

Help you decide your real cost of financing.


What is Shadowstats?
Posted By: skyactiv

Re: Do you make a car payment??? Details please! - 03/08/19 02:45 AM

I'll bring this point up that is overlooked by most. How much money have you been tucking away in your checking or savings account? So all of the sudden, you can afford to make a three or $400 a month car payment but you weren't able to save that much money every month in the past. I'm not saying that's you, but it sure is the average person who fiances a vehicle.
Posted By: clinebarger

Re: Do you make a car payment??? Details please! - 03/08/19 02:48 AM

I hate making car payments!! To each their own though........Gap & Full Coverage Insurance alone is a deal breaker for me! Haven't been involved in a collision in over 20 years & a few hail dents don't bother me!
Posted By: Gasbuggy

Re: Do you make a car payment??? Details please! - 03/08/19 02:49 AM

Using other peoples money is the smart move when done correctly. 4% is a cheap car loan. If you can't get a better return with your own money, then buy the car in full. If you can do something else clever with the money then get the car loan.

And fellas, beware buying in full. I bought my Cadillac outright from the dealership with a certified bank check. The government makes the dealerships have people who buy cars over a certain amount fill out extra paperwork so they can capture money launderers.
Posted By: Skippy722

Re: Do you make a car payment??? Details please! - 03/08/19 02:52 AM

I have a 72 month loan on both cars, one has a ~4.4% interest rate and the other is ~3.5%. Keeps the monthly payment low so if I do get in a tight spot or whatever I’m not hurting for money. Or I can throw more on top of each monthly payment, I like having the flexibility. Neither loan will see the full 72 months. I put 4K down on the 300 and 1000 on the van.

“But you should have a savings in case of emergency!”
I’m was young, dumb, and not finishing this saying, but I’ve learned that I can’t be trusted with a credit card... almost 5 years after buying our house I’m finally learning proper money management. Bought the house before I could buy alcohol, just to give a little age reference wink

Posted By: John_K

Re: Do you make a car payment??? Details please! - 03/08/19 03:02 AM

Originally Posted by skyactiv
I'll bring this point up that is overlooked by most. How much money have you been tucking away in your checking or savings account? So all of the sudden, you can afford to make a three or $400 a month car payment but you weren't able to save that much money every month in the past. I'm not saying that's you, but it sure is the average person who fiances a vehicle.


Or as my Dad would say, if you can't afford it how can you afford it plus interest?
Posted By: Quattro Pete

Re: Do you make a car payment??? Details please! - 03/08/19 03:09 AM

Originally Posted by Gasbuggy
The government makes the dealerships have people who buy cars over a certain amount fill out extra paperwork so they can capture money launderers.
What is that amount?
Posted By: JeffKeryk

Re: Do you make a car payment??? Details please! - 03/08/19 03:11 AM

I have a lease on the RX450h.
I only did it as a hedge against a technology shift.
Kinda wish I hadn't, but it is what it is.

Usually credit unions have decent rates.
Oftentimes factory money is the best deal.

Good luck.
Posted By: Wolf359

Re: Do you make a car payment??? Details please! - 03/08/19 03:14 AM

It's one of the funny perverse things on BITOG. Ask a question and get the exact opposite of the response you were expecting.

Ok, here goes too, made just one payment on my 2008 Mercedes E-350 and one payment on my 2011 E-350. They were both used and under 20k each. As for money laundering, I didn't care, didn't launder any money so no issues even if it were investigated.

Sure you can borrow money at low rates and invest the difference, but when you have money, you can actually spend some of it instead of investing it all the time. It's called locking in your gains.

Anyway, the last time I borrowed money for a car was a long time ago. Interest rates back then were 8%. It was a 3 year loan. I kept getting all these offers in the mail for 0% credit card balance transfers. So I put the balance on a credit card and paid off the whole thing after less than 2 years. At the time I believe the payment was around $400 a month. Back then, they were extra crazy, I think they had something like a $50 balance transfer fee instead of 1-3% like you do today.

As for savings, it's good to have it, I used to keep it in cash sitting in a checking account, but with the stock market rising all the time, I figured I'd just buy mutual funds and if I ever really need money in a hurry, I could always sell and get the money in about a week and could always use a credit card in the meantime. Never had an issue like that. so never had to do that.
Posted By: clinebarger

Re: Do you make a car payment??? Details please! - 03/08/19 03:18 AM

Originally Posted by Gasbuggy


And fellas, beware buying in full. I bought my Cadillac outright from the dealership with a certified bank check. The government makes the dealerships have people who buy cars over a certain amount fill out extra paperwork so they can capture money launderers.


Filled out those forms when I bought my 2500HD & Corolla brand new with $100 dollar bills, Nothing happened......You also have similar forms when depositing more than $10,000 cash in a bank account.

Never worried about it, I pay taxes on my income.
Posted By: Wolf359

Re: Do you make a car payment??? Details please! - 03/08/19 03:22 AM

Originally Posted by clinebarger
Originally Posted by Gasbuggy


And fellas, beware buying in full. I bought my Cadillac outright from the dealership with a certified bank check. The government makes the dealerships have people who buy cars over a certain amount fill out extra paperwork so they can capture money launderers.


Filled out those forms when I bought my 2500HD & Corolla brand new with $100 dollar bills, Nothing happened......You also have similar forms when depositing more than $10,000 cash in a bank account.

Never worried about it, I pay taxes on my income.




Yeah, I think that only applies to cash. Bank checks don't really trigger anything. I see people deposit bank checks for 100's of thousand and they don't bat an eye as they're just house sale proceeds. Also handy to know your bank teller, got a free bank check and just casually mentioned I was buying a car. Got it quick and no delays.
Posted By: meadows

Re: Do you make a car payment??? Details please! - 03/08/19 03:30 AM

Yes, I do. $538/mo. Zero down,1.75percent interest, 60 months. I have 2 years left, and put the money in the credit union at the first of the year, so I do not have to fool with it. The last year, I will just pay it off.
Posted By: NO2

Re: Do you make a car payment??? Details please! - 03/08/19 03:32 AM

Last time we financed a car it was at 0.5% promotional interest. There is nothing wrong with financing, but a better financial decision is to buy a slightly used car and pay cash. Cars last 15-20 years and 200K+ miles now, and buying a 3 year old one at 50% of the new prices makes a lot more sense. The electronics will become obsolete during that time so jest get one that is easily upgradable. If you are using the vehicle for business purposes, that doesn't necessarily apply under the new rules, and you may with to look at leasing. Our current vehicles are 6 and 12 years old and work great.
Posted By: CKN

Re: Do you make a car payment??? Details please! - 03/08/19 03:41 AM

I'm not disclosing my loan-it isn't outrageous or anything-and I can well afford it. I just don't think it's anybody business. And yes-you ask this on a site where OLD CARS COME TO DIE and guys brag about buying close out oil at Walmart.

Let me just say this-life's too short. If you want a new-or "new to you" vehicle ( and can afford it) buy it. OR-you can leave your money to your ungrateful children......

I spent 40 large (after discounts) on my new 2018 Silverado LTZ (4WD) Crew Cab and my son said "You didn't need a new truck". I said so.......

I spent 30ish on my wife's 2017 Hyundai Santa Fe XL 18 months ago.
Posted By: miden851

Re: Do you make a car payment??? Details please! - 03/08/19 03:44 AM

mine was paid by cash in 2010

wifeys is on 60 months with .9% interest; our monthly payment was calculated at $410; however, we pay $500 each month; currently our balance sits at $10K, so about 2 more years to go
Posted By: oilmutt

Re: Do you make a car payment??? Details please! - 03/08/19 03:52 AM

lease payment of $205.56 per month for 2016 Camry for 36 months.
Posted By: mazdamonky

Re: Do you make a car payment??? Details please! - 03/08/19 04:01 AM

I took 0 down 0% interest for 63 months on a Mazda3. So same as cash but I don't have to take it all at once even though I could have afforded buying it straight out cash? I thought it was a good deal. I am only about 7 months in. I got the car for 22129 and am making payments of $351 per month. I could have gone with a base sedan and gotten it for around 16, putting my payments around $250 a month I believe, but I really wanted the 2.5 motor and I am a sucker for a moonroof.
Posted By: Blkstanger

Re: Do you make a car payment??? Details please! - 03/08/19 04:05 AM

Cash is all I will ever spend on a vehicle. If I cant afford to pay cash I can't afford to buy it.
Posted By: Nick1994

Re: Do you make a car payment??? Details please! - 03/08/19 04:06 AM

Bought my 15' Sonata in February 2017 for $10k, or about $11,600 after taxes and fees.

I put $4k down and my payment is $179 a month for 48 months. I have it set to auto-pay at $200 a month. I'd pay it off earlier but I'm young and still building credit (have good credit) so I don't really care.
Posted By: Toy4x4

Re: Do you make a car payment??? Details please! - 03/08/19 04:22 AM

No one can tell what your particular comfort zone is and it seems you probably want to pay as little interest as possible. Choose whichever amount you can swing (while still putting savings away) and if there comes a time where you can pay off the loan without your savings going below a "do not touch" amount, do it.
Posted By: Linctex

Re: Do you make a car payment??? Details please! - 03/08/19 04:23 AM

Only $184 a month, but I put down a huge amount up front.

I would've paid cash if I had it all at the time.
Posted By: NormanBuntz

Re: Do you make a car payment??? Details please! - 03/08/19 04:51 AM

Two pointers. Run away from any dealer arranged financing. Make your best deal without it. Second, if not already a credit union member, seek one out that you're eligible to join. Best rates around, most of the time.
Posted By: CKN

Re: Do you make a car payment??? Details please! - 03/08/19 04:54 AM

Originally Posted by NormanBuntz
Two pointers. Run away from any dealer arranged financing. Make your best deal without it. Second, if not already a credit union member, seek one out that you're eligible to join. Best rates around, most of the time.


Sometimes you have to finance through the dealer to get some of the (manufacturer) rebates. Then you just refinance 30 to 60 days afterwards.....
Posted By: Wolf359

Re: Do you make a car payment??? Details please! - 03/08/19 04:57 AM

Originally Posted by CKN
Originally Posted by NormanBuntz
Two pointers. Run away from any dealer arranged financing. Make your best deal without it. Second, if not already a credit union member, seek one out that you're eligible to join. Best rates around, most of the time.


Sometimes you have to finance through the dealer to get some of the (manufacturer) rebates. Then you just refinance 30 to 60 days afterwards.....


If you want to be nice, you ask what the clawback provisions are wait the 2-3 months that is the typical period. If you pay it off before that time period, they don't get their kickbacks from the lender, after that period, they get their money.
Posted By: madRiver

Re: Do you make a car payment??? Details please! - 03/08/19 05:04 AM

Shortest term possible if loan required. Otherwise you buy a more expensive model then if you had cash in hand. Financing tends to have people spend more then if they saved the cash. My dad is perfect example who never financed car in life and drives the really basic models. You lose reality of what things cost like expensive options or even brand new cars vs used.

Wife borrows for Tiguan and we have 36
Payments , hate it.
Posted By: AZjeff

Re: Do you make a car payment??? Details please! - 03/08/19 05:24 AM

Originally Posted by NormanBuntz
Two pointers. Run away from any dealer arranged financing. Make your best deal without it.... .


Not necessarily. When we bought the used 16 Silverado we had good financing lined up for the $8K needed with the large down payment. The dealer had better financing with a credit union and if you financed $15K you got $1000 rebate from the CU. I checked carefully for any hidden fees or early payoff penalties, there were none so we used their financing got the rebate made 2 payments then paid it off.

Didn't answer the OP's questions but point is dealer financing isn't automatically bad.
Posted By: Lolvoguy

Re: Do you make a car payment??? Details please! - 03/08/19 06:04 AM

Lexus in sig - Bought for 14k in 2017. Yes, it was old but had great maint. records and with only 50k miles. New tires, brakes etc. too.
In the little over 1 year we've had it, only had to change the oil and add gas....literally that's it! (oh and wash it)
Spouse paid her half cash from....I dunno where. She has rental farm land so there's that I guess.
I paid my half from a line of credit which I was paying off with extra cash as I had it. Finally paid off banana

BMW in sig - Bought that when I was young and dumb. I was a university student 16 years ago and wanted to impress females.
Paid cash for it as I worked for the gov't during my summers away from school (also was still living with my parents). Swore it would be my only "sporty" car, as depreciation is a nasty thing.
Luckily it's finally appreciating in value mostly because I restrained myself from the tacky, cheesy "Fast and Furious" mods of the early and mid 00's. Just stuck with repairs and maintenance (which when done correctly, will still drain your wallet!)

Aside from that it's just been a steady stream of cheap, low mileage rental cars ranging from Mustang convertibles, to MB sedans, SUV's and wagons.
Far cheaper than maintaining and paying the depreciation on newer cars.

My cars still turn heads and make me do a double take when walking away from them in a parking lot.
They also put a smile on my face with little persuasion. drive
Posted By: billt460

Re: Do you make a car payment??? Details please! - 03/08/19 10:15 AM

Originally Posted by Imp4
Each of these are within my monthly budget, but the painfully frugal side of me just winces at the notion of a car payment.
I try to soothe my soul by telling myself that plenty of folks out there make car payments every month, but I still sit there and wonder just how much regular people pay.

Don't do it. I can tell by the way you are talking, you'll be sorry if you do. The excitement of buying a new car wears off about as fast as the first kiss with a hot date. But the payments will continue for years to come.

By your own admission you are, "painfully frugal", which is a good thing. You are also trying to talk yourself into this. Which also shows you have good sense. Because it shows you are apprehensive about borrowing money to buy a car. Most people require being talked out of such a thing. You, on the other hand, are trying to talk yourself into it. DON'T.

If you're wincing at the thought of a car payment now, you're the type of person who will be moaning in pain later. You're soul will be much better "soothed" by placing that money in the bank every month, after you pay cash, than it will by writing a check to someone else so they can place it into their account.

I can tell this whole thing goes against what your inner gut is telling you to do. Listen to your gut. Because if you don't you'll be wishing you did a couple of months after you buy it. Save and pay cash, rather than trying to come up with a way to justify borrowing money to purchase a depreciating asset. You'll be glad you did. And you won't be reminded of the mistake you made every month, every time you have to get your checkbook out. Instead you'll be earning interest on that money, instead of allowing someone else to charge you for it.
Posted By: demarpaint

Re: Do you make a car payment??? Details please! - 03/08/19 10:50 AM

I financed my last two vehicles, one at 0% the other was under 1%. It made no sense at all for me to take my money out of savings when the rates were that low. In both cases I could have paid cash. Responsibly borrowing money can be beneficial. If you have any doubts, don't borrow the money. Having said that I probably wouldn't pay 4% for a car loan, I'd pay cash.
Posted By: tony1679

Re: Do you make a car payment??? Details please! - 03/08/19 11:29 AM

Originally Posted by NormanBuntz
Two pointers. Run away from any dealer arranged financing. Make your best deal without it. Second, if not already a credit union member, seek one out that you're eligible to join. Best rates around, most of the time.
This.
Originally Posted by CKN
Sometimes you have to finance through the dealer to get some of the (manufacturer) rebates. Then you just refinance 30 to 60 days afterwards.....
And this if you're buying new.

What's the smartest decision? Always pay cash on something you can afford. If that's not possible, feasible, or you feel the need to buy something more than you can afford, get a loan with the lowest interest rate possible, combined with the shortest number of months financed that you can *reasonably* afford. This will ensure you pay the least amount of interest possible. The longer the term and/or the higher the interest rate, the more you'll pay in interest. Just don't make the payment so high that in a pinch you can't afford it (this is how repos happen).

I went against [some of] these rules when I bought my Elantra, but I had reasons. This particular car was the nicest one within 100 miles. It gets 5 more mpg than the car I was about to buy. It had a few extra details that I valued over the other car (read: the Elantra didn't have problematic/costly tech that the other did, such as DI, turbos, lane assist, etc.). It was more than I wanted to spend, however the deal I ended up making gave me instant equity in the car, because I bought it for less than it was actually worth. The extra 5 mpg earned a lower interest rate through my CU for a "green car" rate. That made it worth it to add an extra year or two to the term (including the interest that would be charged in that timeframe), and lower the payment to what I wanted to be at with the less expensive car. The extra fuel savings was the icing on the cake. That put me in the green. Add that up over the life of the loan and I came out way ahead. Not to mention if I'm paying extra (I am) to further reduce the interest assessed. Bottom line, you always have to look at the big picture and weigh the pros and cons. I don't regret my purchase.

Also, my personal advice (if buying from a dealer regardless of size) is to always make them fight to earn your money. When any of my family or friends want a car, they enlist me because they've seen the results. If you know what car you're looking for, find 3-5 very similar ones and negotiate to their bottom dollar (be a tough, yet serious negotiator. Remember, YOU hold the cards ($$$) not them). After the first one, you can say "dealer B is going to sell me theirs for X amount less. Beat their deal or I walk (and walk anyway, WITH their best offer still on the table). Continue the process with all of the dealers until they bow out of the race and you are down to 2. Once you have it down to 2 they'll usually go toe-to-toe until one gets either annoyed or exhausted. Then you have your best price. Dealers take advantage of you, it's what they live for. Turn the tables and take advantage of them by making them fight against their own kind, and they don't know how to act. It's amusing every time. popcorn
Posted By: Mr Nice

Re: Do you make a car payment??? Details please! - 03/08/19 11:52 AM

I know some wealthy people who finance new vehicles at 1.9% and make 15% with their investments.

Yes, they can afford to pay cash for their new rides.
Posted By: madRiver

Re: Do you make a car payment??? Details please! - 03/08/19 11:55 AM

Because my father was paying cash as always he could never see buying above base model since the $2-$3k to gain alloy wheels, fog lights and heated seats not worth it. In payments $2-3k translates to $21/month which palatable by many.

My wife got caught up in it with her 2018 Tiguan with the sunroof option (massive): I think the $7/month did not bother her and she does like open feel of full front back glass and warmth it makes mid winter. To me that’s $800!

Don’t get tricked by 0% because it does cost. You pay more for vehicle that can get discounted. Happened to us and my brother in law finance manager for years says it’s true .
Posted By: Donald

Re: Do you make a car payment??? Details please! - 03/08/19 12:53 PM

Get it as short a duration as you can afford.
Posted By: Donald

Re: Do you make a car payment??? Details please! - 03/08/19 12:54 PM

The exception is the super low interest rate sometimes offered by the vehicle manufacturer. Why not use their money for free?
Posted By: SeaJay

Re: Do you make a car payment??? Details please! - 03/08/19 01:51 PM

This is similar to another site that I post on. Someone asks for info to help them finance a purchase more smartly. The overwhelming response is "I never finance anything, you shouldn't either"
Posted By: supton

Re: Do you make a car payment??? Details please! - 03/08/19 02:37 PM

I've never taken too much loan (small portion of my monthly expenses) and I've always overpaid on the loan. Well, the one with 0% APR I was not aggressive on, but the others I was. I don't recall any loan being above $330 or so, but I've made plenty of payments at beyond double that to knock down principle. Finally I think the only time I might have been upside down on a car was my first one, and that was because I put so little down--everything since then was big down payment, no fears of needing gap.

Not sure if I want to sign up again for a loan, but I don't have enough in cash to do so on a new car, and every time I go looking people tell me "buy new!" even on this board. You have to admit, buying new is buying the best years. Anyhow, I'd probably play the risk: keep money in savings but put down enough that I'm never upside down on the loan. If finances change and I need to ditch the vehicle, sure I'll lose some money but as long as I can get out and still have cash, well, that's the gamble, right? I mean, I can't change a transmission in my car, I can't have a garage queen, and from where I sit, I still have least 10 maybe 20 years of employment ahead of me. [If not at this job then certainly because I need to work to pay for life!]

I will say that manufacture financing was the easiest. I did a loan through a semi-local bank on used once, and the loan got flipped to some not-so-local bank that didn't do online banking (had to use Western Union of all things to transfer money). Left a bad taste in my mouth, would avoid that in the future.
Posted By: Huie83

Re: Do you make a car payment??? Details please! - 03/08/19 02:44 PM

I do finance because I have other things to pay for as well and have never been able to save up $15K to comfortably plop down on a car.

I try and get in the sweet spot of used cars. 3-5 years old, $10-12K, under 60-70K miles. My last two I paid TTL out of pocket and financed the rest for 4 years @ 3.5% interest. It equates out to like $230 a month.

That's what works for me while I work on paying off other debt like school loans, mortgage etc. I also need to put money away for retirement. I do pay extra payments whenever possible when everything else is accounted for including retirement and savings.

Eventually I would like to be able to pay cash for a vehicle.
Posted By: Spector

Re: Do you make a car payment??? Details please! - 03/08/19 02:45 PM

can you actually get an interest rate at 4% on a car when mortgage rates are close to 5%. Most car loans would normally be 2-4 percentage points higher than a mortgage rate
Posted By: BMWTurboDzl

Re: Do you make a car payment??? Details please! - 03/08/19 02:52 PM

Originally Posted by Imp4
Originally Posted by BMWTurboDzl
Inflation (Official): 2 percent
Inflation (Unofficial via Shadowstats): ~5 percent.

Help you decide your real cost of financing.


What is Shadowstats?


The US Govt changed the formula used to calculate the official rate of inflation. The argument was that the change resulted in a more accurate number and the naysayers argued that it was designed to reduce the actual rate of inflation in order to justify lower COLA adjustments for Social Security recipients among other things. Shadowstats is a site which tracks inflation using the old formula.
Posted By: SevenBizzos

Re: Do you make a car payment??? Details please! - 03/08/19 02:53 PM

Yes, I do. I went without one for about two years, but jumped back in this fall. It was 0%, so I signed and walked out. Real estate is not a particularly good investment around here, so we decided on keeping the smaller house and have a nicer car and take better vacations. We will be the only owners of the vehicle so we're going back to no payments after we're done.
Posted By: Huie83

Re: Do you make a car payment??? Details please! - 03/08/19 03:05 PM

Originally Posted by Spector
can you actually get an interest rate at 4% on a car when mortgage rates are close to 5%. Most car loans would normally be 2-4 percentage points higher than a mortgage rate


Yes, I just got a 3.5% though VW finance on my used VW Golf I picked up 2 months ago.
Posted By: doitmyself

Re: Do you make a car payment??? Details please! - 03/08/19 03:15 PM

Originally Posted by SeaJay
This is similar to another site that I post on. Someone asks for info to help them finance a purchase more smartly. The overwhelming response is "I never finance anything, you shouldn't either"


That's a huge understatement! A few people here sway the discussions with their narcissist tendencies. When challenged, they retort with "I must have struck a nerve" or "you feel insulted" to appease their insecurity. There's nothing wrong with being proud of one's accomplishments. But, people that are comfortable in their skin tend not to have a need to preach to others about their greatness. Often times these same people tend to be hypocrites, giving out advice and criticizing, then turning around and doing exactly what they preached against. It gets tiring not being able to have discussions without the interruptions.

The bottom line is that a person can finance a vehicle and still be fiscally responsible. As shown above in several good responses, there are numerous ways to finance vehicles without going down the dark road of anti-Dave Ramsey. Off my pulpit now - continue on.
Posted By: Imp4

Re: Do you make a car payment??? Details please! - 03/08/19 03:16 PM

Originally Posted by Spector
can you actually get an interest rate at 4% on a car when mortgage rates are close to 5%. Most car loans would normally be 2-4 percentage points higher than a mortgage rate

Yes, new car loans through PenFed are running right around 3.75%.

Used is around 4.25%.
Posted By: DzoG20

Re: Do you make a car payment??? Details please! - 03/08/19 04:06 PM

I like to have a car payments close to what it costs me to own the vehicle on AVERAGE, given that the interest is close to the inflation rate - using credit union. I calculate the average from the new car purchase value (out of the door with all the fees) and keeping the car for 10 years. The 10-11 years assumption would roughly evens out the residual car value and the cost of eventual repairs. So $20-30k purchase value results in $167-250/month. Then I look for 3 years old car, typically coming off lease and priced at 65-70% of the new car value. This way I can structure a payment plan (5years) with similar $167-250/month if I put a down-payment of equivalent of 2years of the average car cost - i.e 20% of the new car value. Also is more obvious if this model year has a design issues - after these 3 years of existence. To define the car age I prefer to look at manufacture date instead of the posted model-year. For 3 years old car it makes a difference. Then after paying the car off I have 2 years to save for the next car's down-payment at the same rate.
Posted By: buster

Re: Do you make a car payment??? Details please! - 03/08/19 04:33 PM

I have no issues with a car payment. I like to put money down and I usually get a very low i-rate. I like to have a car through the 5 year powertrain warranty period then either keep it until it gives me a problem, then I trade it in and move into another car. If you can keep a car 10 years with minimal maintenance, that's great, but if it starts needing major repairs, no thanks. Ain't nobody got time for dat!
Posted By: exranger06

Re: Do you make a car payment??? Details please! - 03/08/19 04:38 PM

I just bought a used car last week - my 2013 Sienna van. Total out-the-door price was around $13,500. I put $4k down, and financed the remaining $9.5k. I got a loan at my credit union, as they had the best rate - 3.49%. The car salesman was amazed I got a rate that low, and told me straight-up there was no way the dealer financing could beat that rate. They would only finance it a maximum of 42 months, so that's what I did. Monthly payment is $242. I hate having a car payment and I would've paid cash if I could. Hopefully I'll have it paid off early.

Posted By: Wolf359

Re: Do you make a car payment??? Details please! - 03/08/19 04:49 PM

Originally Posted by Spector
can you actually get an interest rate at 4% on a car when mortgage rates are close to 5%. Most car loans would normally be 2-4 percentage points higher than a mortgage rate


It's because the financing arms of the car companies don't have to make a huge profit, they're there basically to help sell cars so they can offer artificially low rates. You're thinking of banks and credit unions, their rates tend to track the markets, but they're not as high as mortgage rates because those are typically 15 to 30 year loans and car loans are only 3-7 years.
Posted By: buster

Re: Do you make a car payment??? Details please! - 03/08/19 05:11 PM

My current loan is .9% LOL. Car will be paid off in a few months.
Posted By: Oil_Whisperer

Re: Do you make a car payment??? Details please! - 03/08/19 05:11 PM

There are two financial issues to consider. Paying interest and owning a depreciating asset.
Buy the time a car gets >10 years old, the depreciation slows way down. If you can find an older car with low mileage, you can usually just pay cash.
I will buy a 10 - 20 year old car with < 50k miles on it. Drive it for several years. Then sell it for not much less than what I gave for it.
Owning vehicles doesn't have to be expensive.
Everyone has their own tolerance level for debt. Mine is very low.
Posted By: buster

Re: Do you make a car payment??? Details please! - 03/08/19 05:11 PM

Originally Posted by Oil_Whisperer
There are two financial issues to consider. Paying interest and owning a depreciating asset.
Buy the time a car gets >10 years old, the depreciation slows way down. If you can find an older car with low mileage, you can usually just pay cash.
I will buy a 10 - 20 year old car with < 50k miles on it. Drive it for several years. Then sell it for not much less than what I gave for it.
Owning vehicles doesn't have to be expensive.
Everyone has their own tolerance level for debt. Mine is very low.


Makes sense.
Posted By: billt460

Re: Do you make a car payment??? Details please! - 03/08/19 05:19 PM

Originally Posted by SeaJay
This is similar to another site that I post on. Someone asks for info to help them finance a purchase more smartly. The overwhelming response is "I never finance anything, you shouldn't either"

No one is saying that. The OP needs to do what makes the most sense to him. He has stated that, "The painfully frugal side of me just winces at the notion of a car payment." That pretty much says making car payments of any kind, for any reason doesn't sit well with him. Trying to prove to him otherwise isn't going to change his feelings. If he does finance, it will simply reinforce them. And he will most likely regret it.

So in his case he shouldn't do it. Some people don't like debt... Any debt. Others can sleep like warm puppies drowning in it. You have to do what's best for you. I can relate to the OP's feelings because I share much the same one's. I'm frugal and hate debt. So I don't carry any, and I'm the happier person for it. I interpret the OP as someone who is similar. Because of that my advice to him was to go with his inner gut feelings, and don't finance. Because whatever his decision is, he and he alone is going to be the one who has to live with it.
Posted By: JTK

Re: Do you make a car payment??? Details please! - 03/08/19 05:42 PM

For our daily drivers, I always finance the majority of it and always will with auto loans being so cheap and easy to get. I do it only after I find the deal I want and the interest rate I want. I haven't had a loan rate higher than ~3.5% in many years with terms from 48-72mo. Again, it depends on the deal, the mileage, condition and usage of the vehicle. I typically buy late model used. I try to put enough cash down so that I wont be upside down should I need to sell/trade early. For our two daily drivers, my 2017 Ram 1500 and the bride's 2016 Nissan Quest, our monthly loan payments are ~$650. Insurance is ~$110/mo. Both of my current loans are under 2.75%
Posted By: JTK

Re: Do you make a car payment??? Details please! - 03/08/19 05:52 PM

Originally Posted by Oil_Whisperer
There are two financial issues to consider. Paying interest and owning a depreciating asset.
Buy the time a car gets >10 years old, the depreciation slows way down. If you can find an older car with low mileage, you can usually just pay cash.
I will buy a 10 - 20 year old car with < 50k miles on it. Drive it for several years. Then sell it for not much less than what I gave for it.
Owning vehicles doesn't have to be expensive.
Everyone has their own tolerance level for debt. Mine is very low.



That is very wise and the way to keep your cost per mile the lowest. That scenario is very difficult to achieve living in the rust belt. Not impossible! Just takes some doing.
Posted By: supton

Re: Do you make a car payment??? Details please! - 03/08/19 05:59 PM

Originally Posted by JTK
Originally Posted by Oil_Whisperer
There are two financial issues to consider. Paying interest and owning a depreciating asset.
Buy the time a car gets >10 years old, the depreciation slows way down. If you can find an older car with low mileage, you can usually just pay cash.
I will buy a 10 - 20 year old car with < 50k miles on it. Drive it for several years. Then sell it for not much less than what I gave for it.
Owning vehicles doesn't have to be expensive.
Everyone has their own tolerance level for debt. Mine is very low.



That is very wise and the way to keep your cost per mile the lowest. That scenario is very difficult to achieve living in the rust belt. Not impossible! Just takes some doing.

Indeed. That is why I jumped on my Camry from Arizona, didn't even have to drive out of state to get it! One of my better purchases I think. Unfortunately it's been sitting all week while I wait for the weekend so I can find out what is wrong with it (suspension issues). Thankfully I went to N+1 vehicles when I got ours paid off and can do that. Has been nice, no payments for two years, and somehow few repairs, although I suspect that will change soon as the fleet gets all the older.
Posted By: mbacfp

Re: Do you make a car payment??? Details please! - 03/08/19 06:16 PM

I never financed a car when I was younger, always paid cash. However, my last 2 car purchases in 2012 I was able to get 0% financing for 5 years...so I kept my cash. My latest purchase in 2018, my mid life crisis purchase, I put a lot down plus trade in ($33,000) but have a payment at 4% interest for 5 years. I am making extra payments and should be paid off in 3 years. Kind of embarrassed to have an interest rate other than 0% (which are harder to get nowadays). No shame in a car payment...just get the best deal you can on rates, etc.
Posted By: SeaJay

Re: Do you make a car payment??? Details please! - 03/08/19 06:35 PM

Originally Posted by doitmyself
Originally Posted by SeaJay
This is similar to another site that I post on. Someone asks for info to help them finance a purchase more smartly. The overwhelming response is "I never finance anything, you shouldn't either"


That's a huge understatement! A few people here sway the discussions with their narcissist tendencies. When challenged, they retort with "I must have struck a nerve" or "you feel insulted" to appease their insecurity. There's nothing wrong with being proud of one's accomplishments. But, people that are comfortable in their skin tend not to have a need to preach to others about their greatness. Often times these same people tend to be hypocrites, giving out advice and criticizing, then turning around and doing exactly what they preached against. It gets tiring not being able to have discussions without the interruptions.

The bottom line is that a person can finance a vehicle and still be fiscally responsible. As shown above in several good responses, there are numerous ways to finance vehicles without going down the dark road of anti-Dave Ramsey. Off my pulpit now - continue on.


Thanks for that response. Preaching was the word I was trying to come up with, rather unsuccessfully.
Posted By: Oil_Whisperer

Re: Do you make a car payment??? Details please! - 03/08/19 07:05 PM

I hope that my post didn't seem that way. I realize that I'm not normal when it comes to vehicle ownership.
If someone is inspired to do what I do, that is fine. I really expect most people to keep purchasing new or newer cars.
Posted By: CKN

Re: Do you make a car payment??? Details please! - 03/08/19 07:13 PM

Originally Posted by Wolf359
Originally Posted by CKN
Originally Posted by NormanBuntz
Two pointers. Run away from any dealer arranged financing. Make your best deal without it. Second, if not already a credit union member, seek one out that you're eligible to join. Best rates around, most of the time.


Sometimes you have to finance through the dealer to get some of the (manufacturer) rebates. Then you just refinance 30 to 60 days afterwards.....


If you want to be nice, you ask what the clawback provisions are wait the 2-3 months that is the typical period. If you pay it off before that time period, they don't get their kickbacks from the lender, after that period, they get their money.


True-one needs to look at the whole situation. Even though I got top dollar for my trade-they sold it for a good amount over what they gave me for it. And it was sold on the FIRST WEEKEND-it was available. I kept the loan three months so they got their "kick back". This was not a "mega dealer" but a small family owned dealership.
Posted By: Mr Nice

Re: Do you make a car payment??? Details please! - 03/08/19 07:52 PM

Here in Florida you can buy a used Camry for $10K and drive it another 15 years.

Most cars get boring after 10 years...
Posted By: Patman

Re: Do you make a car payment??? Details please! - 03/08/19 08:09 PM

No car payments here. The Civic was bought used in 2011 for $9300 CDN, the BMW bought used in 2014 for $22,000 CDN and I bought the Corvette new (but probably would have bought it used if I could have saved significant $$$ but the used ones at the time were only about $5000 less than I paid for mine)
Posted By: Mr Nice

Re: Do you make a car payment??? Details please! - 03/08/19 08:14 PM

When did you get a new Corvette ?

Unfortunately lots of used Corvettes are abused.
Posted By: 02SE

Re: Do you make a car payment??? Details please! - 03/08/19 08:37 PM

Originally Posted by Mr Nice
When did you get a new Corvette ?

Unfortunately lots of used Corvettes are abused.


If you want a Corvette, as you've mentioned periodically, now might be a good time to look. There is a glut of them in inventory.

Corvette inventory
Posted By: DriveHard

Re: Do you make a car payment??? Details please! - 03/08/19 08:49 PM

I could have written a check for my wife's Alfa, but I got less than 4% financing (3.xx%). Between inflation, and the interest I am still earning on that money sitting in a bank, it was a no-brainer to finance the loan.
Posted By: GMFan

Re: Do you make a car payment??? Details please! - 03/08/19 10:05 PM

First car in college, I paid $3,800 cash. Once that car died a few years later, I financed a new car (in my sig) for 60 months at 0%, at $261/month. I paid it off around the 50 month mark I believe. I could have paid it off sooner, but it was at 0% so I wasn’t in a rush. I like not having car payments, so my next car will be paid for in cash.

Honestly, after 3-6 months the new car excitement wears off, but the payments remain. If you’re gut is telling you not to do it then don’t.
Posted By: JustN89

Re: Do you make a car payment??? Details please! - 03/08/19 10:13 PM

I financed my Elantra- 72 months with a .99% interest rate through a local credit union. I did that because it would be a financial mistake not to. I could take $14k out of my savings account (which accrues 1.5% interest) and pay upfront, or take a loan on that amount and pay the .99% interest on it. I come out ahead keeping my money in my savings account. My payment is $205/month.
Posted By: Leo99

Re: Do you make a car payment??? Details please! - 03/08/19 10:46 PM

Originally Posted by Oil_Whisperer
There are two financial issues to consider. Paying interest and owning a depreciating asset.
Buy the time a car gets >10 years old, the depreciation slows way down. If you can find an older car with low mileage, you can usually just pay cash.
I will buy a 10 - 20 year old car with < 50k miles on it. Drive it for several years. Then sell it for not much less than what I gave for it.
Owning vehicles doesn't have to be expensive.
Everyone has their own tolerance level for debt. Mine is very low.



That's cool. Other folks have very low tolerance for unreliability and hence, want newer cars they feel have a lower likelihood of needing repairs.

A car with 200k miles and one with 300k miles are worth almost the same amount. It's like free miles.
Posted By: Leo99

Re: Do you make a car payment??? Details please! - 03/08/19 10:48 PM

My Camry was the same price for cash or 0% financing with 0 down. Was a no brainer. I'm much better at paying a monthly bill than saving the same amount per month.
Posted By: gregk24

Re: Do you make a car payment??? Details please! - 03/09/19 02:37 AM

Originally Posted by Spector
can you actually get an interest rate at 4% on a car when mortgage rates are close to 5%. Most car loans would normally be 2-4 percentage points higher than a mortgage rate


Both cars are paid for but 3 or so years ago I got a loan for the Accord with 1.9% interest.
Posted By: PandaBear

Re: Do you make a car payment??? Details please! - 03/09/19 02:42 AM

4% definitely not. My cheapest mortgage is 2.5% and most expensive one is 3.25%, my car load is 1.5% so might as well (and I use the extra money to pay off my loan early).
Posted By: Patman

Re: Do you make a car payment??? Details please! - 03/09/19 11:50 PM

Originally Posted by Mr Nice
When did you get a new Corvette ?


I factory ordered it in the fall of 2017 and took delivery on Dec 20, 2017.

Quote
Unfortunately lots of used Corvettes are abused.


I have found more often than not they are well cared for up here, as they are generally not used as daily commuters.
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