People and car payments

Anti-stance wrote: In reply to gamby: Putting alot of money down is something that the type of people I am referring to do not do. Simply unfathomable.

I gotcha.

There are a lot of people who think they "deserve" a new car and will strap themselves with a big payment (or even more useless, a big lease payment) just to look faux baller.

As if there is some sort of shame in a $3000 beater.

I normally finance, I average in the market way way above the 1.9%. But and its a big but I have the cash on hand to buy all the cars at any time for any reason.

Toy/Weekend cars are cash only period irregardless of interest rate.

I definitely understand the original point, and worry about the people in debt up to their eyeballs too.

That being said, and more in line with the turn this thread has taken.....my Z06 was paid off, and I just took out a loan against it. The credit union offered 1.5%, even though I already owned it outright, and I took that money.......and promptly invested it . With the current return, the loan is paying ME 10%!

It certainly doesn't work for everyone, but the monthly payment is affordable, so even if we had another 2008 type crash, I could leave the money invested and not worry too much.

Anti-stance wrote: Credit score = I love debt score

A thousand times this.

I'm not knocking folks that want/need to borrow money, I'm just pissed off because it seems that credit ratings have absolutely nothing to do with your ability to manage your own finances..and everything to do with how well you can continue to pay the lender's sweet, sweet interest.

friedgreencorrado wrote:

Anti-stance wrote: Credit score = I love debt score

A thousand times this. I'm not knocking folks that want/need to borrow money, I'm just pissed off because it seems that credit ratings have absolutely nothing to do with your ability to manage your own finances..and everything to do with how well you can continue to pay the lender's sweet, sweet interest.

Yes this is all very true but sadly its also a necessary evil. When I bought my current house 6 years ago I had been living cash only for at least 2 years. I didn't bother to track my score at that time so I was a bit shocked when I got terrible mortgage rates because my score sucked. I've never missed a payment on anything in my life but living cash only and having no outstanding debt was killing my score.

If you can afford to pay cash for your house too then I guess it's not a worry, if not then keep a good score.

I do track my score religiously now and I follow its movement on a monthly basis, it was very shocking to see how much of a hit I took by paying off my car and how much I gained by financing another. As others have said, I could have paid cash for a new car, but that cash is currently earning 10-15% why not use someone else's money at < 2%?

Someone has to buy those new cars so us cheapskates can buy 'em used.

The fact that a car salesman said that doesnt surprise me. I was one for three years, not that long in reality but most of my working adult life and I personally refused to drink the Kool-Aid what I mean by that is simple. When your only goal is to separate between 10 and 40 people from as much of their money as possible every month its much harder when you dont believe in what you're doing. From my experience out of say 80 sales employees in the dealer group in the area I worked I was the only car person. Every one else is there for the money Every day you hear "this car has xx,xxx miles on it its going to need work soon" or "I deserve a new car (usually people who dont)"

With that said as a young person I bought the SRT4 in 2010 on a 5 year loan I am still paying on it and intend to ride the loan out simply to build credit. I just bought a truck this year again on a five year loan. Without getting too personal adding another car payment raised my credit score substantially I was really surprised. For those of you who say credit is not needed please reconsider one day in your life something will happen that you cant or at least shouldnt give up all your cash/holdings for. That said over the course of this time my daily drivers have been a 95 neon 181,000mi 90 miata 267,000mi, and, a 97 neon acr 111,000mi I keep the daily drivers paid for and cheap because they tend to get messed up and worn out quicker.

As close as I have come to the Kool-Aid was and this has stayed though I'll probably never do it is leasing, if you adapt the mindset of most people (I want a new car every 3 years, no money down, low interest, low payments, more car than is required) it really is the better way financially. Work backwards from the time. 3 years if you lease for 3 years at the end you have nothing. If you finance a car for 5, 6, 7, or, now as much as 10 years in 3 years when you want a new car you have a big big negative in front of your number. On here we will see things differently because we in general don't think like the average consumer.

I just bought a new van. I financed $20k and paid the other $50k or so with a check. We paid off our old van years ago (it was a 2002) and just saved the money knowing we would need a new one at some point. Have to by one that is modified with a lowered floor and wheelchair lift, thus the big cost. The people at the dealer thought we were joking when we told them we were paying over $50k down. I cannot imagine the payment that would go with financing the entire amount even with the low rates.

All valid points...

However, this guy cares more about being in an elite car, BMW and now Lexus while living in an apartment complex. Not quite your "I'm getting a car loan to establish credit" kinda guy. If that were the case, go buy a Ford Fiesta or something and put $5K down. I understand everyone's "But, I have to buy a house one day" auto loan justification stories, but this isn't the planned out, financial decision type of person I am talking about.

I have seen more than my fair share of these people that Carmugeon is talking about that come in and try to trade in a car that they have been in for less than a year when I sold cars. THAT, is the kinda person I am talking about.

Oh, and these kinda people I am talking about are the same kinda people that rag on me for driving a 95 Camry and bringing my lunch to work everyday instead of having a car loan and eating at Burger King everyday.

If they screwed with you, you could have done it with a credit card just to annoy them back.....the transaction fee would be epic

Anti-stance wrote: All valid points... However, this guy cares more about being in an elite car, BMW and now Lexus while living in an apartment complex. Not quite your "I'm getting a car loan to establish credit" kinda guy. If that were the case, go buy a Ford Fiesta or something and put $5K down. I understand everyone's "But, I have to buy a house one day" auto loan justification stories, but this isn't the planned out, financial decision type of person I am talking about. I have seen more than my fair share of these people that Carmugeon is talking about that come in and try to trade in a car that they have been in for less than a year when I sold cars. THAT, is the kinda person I am talking about. Oh, and these kinda people I am talking about are the same kinda people that rag on me for driving a 95 Camry and bringing my lunch to work everyday instead of having a car loan and eating at Burger King everyday.

True. Keep it up and one day you can legally purchase your co-workers well probably not but when the co-worker you accidentally slept with asks you for money you can turn her down sweet sweet victory lol

I may have to turn in my GRM card. I might be the only person on the board that leases. Through work I can lease with unlimited mileage, all maintenance included, all consumables (tires via wear or damage) included, Sirius radio and insurance included. I break it, I get a loaner. I only have to put gas in it. It was a little weird at first leasing but I look at it as a rental. And nothing parties like a rental! The last few years I have been driving about 50k a year so it all works out good for me.

friedgreencorrado wrote:

Anti-stance wrote: Credit score = I love debt score

A thousand times this. I'm not knocking folks that want/need to borrow money, I'm just pissed off because it seems that credit ratings have absolutely nothing to do with your ability to manage your own finances..and everything to do with how well you can continue to pay the lender's sweet, sweet interest.

Well, to be fair... that is why it's called a CREDIT SCORE, not a "financial management score". It is simply an indicator of how well you meet the criteria of people who lend money.

T.J. wrote: I just bought a new van. I financed $20k and paid the other $50k or so with a check.

Please tell me it was some kind of super fancy special luxo van thing or a big cargo vehicle. I don't want to live in a world where a regular van costs $70,000.

<~~ bought my last new car in 2004 and isn't ready for that kind of sticker shock.

Understand that it is all about your priorities. 2008 happened when the financial markets collapsed but so far the solution by the Feds has been to get ppl to borrow money again(are you familiar with the phrase "consumer confidence"). The US economy is based upon borrowed money and thus the emphasis on credit score. Great for the country and the economy but horrible for most of the average people in the world.

For most of us individuals, you only need credit to buy a house and periodically, a good car. I prefer to have toys so the house is less than what my peers are trying to pay for, but mine is paid off, and my DD's are older and paid for.

The Missus and I will likely always own one daily, and be making payments on the other. I like my 90s car (for the most part), and she wanted AWD for wintertime, so the Terrain came into the picture for her to drive. When the GMC is paid off, I will likely trade my G20 in on a Cruze or (pipedream) a Regal GS. That way, we have only one payment, which also buys us a warranty, and the daily fleet stays relatively young.

Best case scenario though is that the G20 isnt worth much by then, so I keep it as a project, and swap out the slushbox for proper gear selector, and booooost.

All you freaks aside, it's pretty normal for people with a good job to consider a car payment pretty much the same as a house payment (or rent). You don't have to be up to your eyeballs in debt, it's just another monthly expense to budget.

We went through a string of car purchases and sales when my wife and I were married and starting having kids, but I think we've stabilized the fleet for the time being. We're down to three, and should stay there for the foreseeable future (I might pick up a cheap toy for cash at some point). All three were financed for varying amounts, and all were paid off well before the scheduled payoff date. The interest rates on each loan were excellent, and financing allowed us to save for a new house, as well as keep an emergency fund.

I don't think there are any hard and fast rules, as everyone's situation is different. However, I think many people stretch beyond their means to drive an impressive car, and that can be very hazardous to your financial health. That's not to say driving a newer car doesn't cross my mind every single day, but I'm content with what we have and the choices we've made.

I have no problems making a car payment, interest rates are dirt cheap. Like it or not, it helps out with credit score too. It's common sense, don't borrow what you can't afford to pay back.

Right now we've got 5 running/driving cars at the house, plus 2 non-running projects. Of those 5, we own 4 and have a payment on one. I'm cool with that. I'd be cool with a payment on 2 if we really needed, though that's certainly not in the plans.

I would love to buy a new Abarth but I just don't have the spare money considering I am saving for a honeymoon and a downpayment on a house and there is a chance SWMBO will be only a substitute teacher next year which would make money a little tight. My biggest problem is if I had car payments that would cut into my playing with cars money (which on a sad note is it weird that I spend more on playing with cars then rent or food? Only thing that is a bigger part of my budget is savings.)

Honestly probably the only time I will end up with car payments is when SWMBO needs a new car.

moxnix wrote: at 1.99% right now why not have a car payment?

Because it feels like having to buy a new starter or alternator every month. I've used some really questionable cars as daily drivers, but never had one that required as much spending on a monthly basis as the time I had a car payment.

Back to the original example of a new 300 bought with cash, though, that might be a little surprising just because many of the buy cash brigade also buys cheap cars to start with. But if I had my sites set on a more expensive car, yeah, I'd pay cash for it too. Just takes more time to save up for it, and if something bad happens, I can use the savings elsewhere instead of having money tied up in having to go to paying for the car.

Anti-stance wrote: All valid points... However, this guy cares more about being in an elite car, BMW and now Lexus while living in an apartment complex. Not quite your "I'm getting a car loan to establish credit" kinda guy. If that were the case, go buy a Ford Fiesta or something and put $5K down. I understand everyone's "But, I have to buy a house one day" auto loan justification stories, but this isn't the planned out, financial decision type of person I am talking about. I have seen more than my fair share of these people that Carmugeon is talking about that come in and try to trade in a car that they have been in for less than a year when I sold cars. THAT, is the kinda person I am talking about. Oh, and these kinda people I am talking about are the same kinda people that rag on me for driving a 95 Camry and bringing my lunch to work everyday instead of having a car loan and eating at Burger King everyday.

That's CURMUDGEON, thankyaverramuch.

I've bought maybe 35 - 40 cars in my life ( yeah I know that's low for our forum ) 2 of which were new, '76 Civic, paid off in less than the 3 yr loan( drove it long enough that the depreciation didn't matter {350k miles}) and the '01 Integra, paid off in 3 yrs ( 5 yr loan, and I still have it 11 yrs later ) every thing else (that I own now ) was cash ... the early cars were loans, and yeah they hurt me some, but I got over it and learned a lot ....

all that aside I'll probably buy 1 more new car , maybe 2 yrs from now .. ( when I get out from under this COBRA ins payment ) it'll hopefully be my "last" car .. hope the interest rates are still as low then as they are now

Anti-stance wrote: Oh, and these kinda people I am talking about are the same kinda people that rag on me for driving a 95 Camry and bringing my lunch to work everyday instead of having a car loan and eating at Burger King everyday.

Wow. Eating at BK everyday? Well, that certainly is the epitome of big spendin' and classy eatin'!

1988RedT2 wrote:

Anti-stance wrote: Oh, and these kinda people I am talking about are the same kinda people that rag on me for driving a 95 Camry and bringing my lunch to work everyday instead of having a car loan and eating at Burger King everyday.

Wow. Eating at BK everyday? Well, that certainly is the epitome of big spendin' and classy eatin'!

I think the reference was to the $$$$$$ spent each week vs the ¢¢¢¢¢ spent bringing his lunch from home